The usual suspects also provided assistance and occasional inspiration. Also. I would like to thank all at AMACOM in New York who have enthusiastically published and promoted my books in the United States. Along the way.Acknowledgments
Mark Allin and Richard Burton of Capstone continue to pick up the tab for lunch.
. I have met and interviewed many of the contemporary thinkers featured in this book. Someone has to. I would therefore like to thank them all for their time and generosity.

’ The Economist1
.‘The only thing worse than slavishly following management theory is ignoring it completely.

funeral parlours. Their ideas – in the age of knowledge and intellectual capital –are the new corporate currency. Kenichi Ohmae is no longer a McKinsey consultant revealing the secrets of the Japanese approach to strategy. a new leading group. And Tom Peters. The Practice of Management. The word ‘revolution’ can increasingly be found on dustjackets (even though between the covers there is often little that is original let alone
. Drucker’s bold pronouncement holds true. Charles Handy has become a bestselling social philosopher rather than a business school academic. whether we manage hospitals. History is moving and it is moving in their direction. Modern management thinking announced itself a little earlier when. Harvard Business School’s Michael Porter is no longer simply a distinguished academic. but a consultant to entire countries who writes books about the competitive advantage of nations. Rarely. ‘Business people need to understand that it is ideas that move history. has a new basic institution. No longer does a new management idea aim to change one aspect of a particular job.3 Management is the art and science of our times and management thinkers have become its high priests. We are all managers now. Rarely in human history has a new institution proved indispensable so quickly.Introduction
According to the British poet Philip Larkin. Most are intent on changing the world. in his masterly 1954 book. emerged as fast as has management since the turn of the century. Philip Kotler. schools. has expanded his repertoire to encompass everything from the managerial lessons of cooking to the powers of Zen Buddhism. farms or football teams. the archetypal popular management theorist.’ says marketing guru. if ever. but an aspiring politician drafting manifestos for the governments of the world. the gurus. Peter Drucker confidently asserted that management had arrived as ‘a distinct and a leading group in industrial society. sexual intercourse began in 1963. New horizons have produced broader ambitions.4 What business thinkers say and write matters.’2 Over 40 years later. Politicians embrace management with their focus groups and managerial jargon.

students of the guru business.’ RIP Adam Smith. The skyline is crowded with an array of thinkers and gurus. There is a steady supply of new insights into old ideas. reverential treatment and influence’. . ‘I think it is a packaged goods business. In the early 1990s. we are still awaiting the new beginning and reengineering is fading into history. managerial theorizing is no longer a world of timid academics and obscure journals. As Champy and Hammer’s capacity for soundbites suggests. There are brave new worlds – and words – aplenty. say academics Timothy Clark and Graeme Salaman.The Ultimate Business Guru Book
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revolutionary). . There is nothing wrong with this. and like other stars their reputation and success is built upon their personal performance’. With that comes a constant churn of material for corporate chieftains to feed on. Because of their prominence in society this is always going to
. With typical gusto.5 Management. . The sheer mass of new material suggests that quantity comes before quality. Management theorizing has become adept at finding new angles on old topics. inevitably. has become populist. It is theory with attitude. A few years on. Reengineering is a new beginning. the universal science. reengineering gurus Michael Hammer and James Champy proclaimed their own revolution. was concerned with ‘rejecting conventional wisdom and received assumptions of the past . that corporations are the dominant social institutions of our age you have to reckon with the fact that corporations are very influential. they said that their big idea. If you take the premise. it is about reversing the industrial revolution . ‘Gurus perform. and the power of their performance justifies their appearance fees. Certain trappings go with the party – a whole group of jesters like me. There is an unquenchable thirst. . there are critics aplenty. The final word on a subject such as leadership is unlikely ever to be uttered. Indeed. ‘Gurus aren’t teams – they are stars. tradition counts for nothing. author of Managing on the Edge and as thoughtful a jester as you are likely to find. management is fundamentally concerned with seeking out modern approaches to age-old dilemmas. as I do. reengineering. And. each armed with a magic potion to cure all known corporate ills. ‘It is part of the fanfare surrounding these institutions.’ says Richard Pascale.

Managerial thinking is adorned – and too often tainted – with ever greater hype and hyperbole. It touches everyone. (Of course. Frederick Herzberg and Abraham Maslow. In the 1960s there was Alfred Chandler. or as a sign of ever-increasing desperation among managers to find ways in which they can make sense of the business world. there is a certain cynicism about the material. At the time they were recognized as significant thinkers in the field of management. There was a time when management thinkers worked quietly and diligently away in the hallowed halls of academia.introduction
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be with us though. The emerging agenda can be seen as driven by the media as much as by the research interests of academics or the needs of business.6 Richard Pascale is undoubtedly right.
Inventing the guru
It was not always like this. It was a good business to be in. among the CEOs I speak to. Alternatively. Today. there can hardly be a manager in the Western world who has not
. As virtually all worked for major business schools with generous salaries. They wrote books that didn’t sell in huge numbers. They wrote articles in academic journals. In the 1960s and 1970s you did actually get paid more if you ran an organization. you can regard the merry go-round of ideas as an indication of just how vital effective management is to the economies and people of the world.) In the 1950s there were people like Douglas McGregor. gave the occasional seminars and worked as consultants for a few large corporations. The world of management thinking has been transformed. and more positively. they did just fine. this can be attributed to the substantial financial rewards available for those with the next bright idea to sweep the globe. everywhere. carefully penning dense articles and books to be published in obscure journals. but nothing special. Depending on your perspective. There is a great deal of skepticism about many of today’s managerial ideas. but were significant enough to prove influential. some still do so. leading into the 1970s when Henry Mintzberg first came to prominence. Ted Levitt and Igor Ansoff.

There is some truth in all these accusations. Andrew Campbell. And then there are the consultants with their theories and formulae. was born in Vladivostock to a Russian mother and an American father. While management thinking is clearly open to criticism on a number of fronts – too shallow. Gunnar Hedlund. Only at the very end of the century is a convincing case being made for more global interpretations of American truisms. in management thinking at least. too American. was born in Germany. The passage to guru status usually involves a progression from an American business school (preferably Harvard). Charles Handy. the business schools with their resident experts advocating particular tools and techniques. the father of strategic management. BCG. too general. publishers. The onslaught of ideas is not always welcomed or celebrated. marketing advisers – and it involves a lot of handshaking. Charles Hampden-Turner and Fons Trompenaars. Some gurus have taken this requirement very seriously – Igor Ansoff. travel and some measure of sycophancy. to articles in a leading American business journal (the Harvard Business Review or Strategy & Business). publicists. Indeed. The gurus tend to come from much the same backgrounds and often say much the same things.) Historically. and from there to work with a big name consulting company (McKinsey. Bain or Booz Allen & Hamilton). Peter Drucker was born in Austria and Ted Levitt. barely a week goes by without another article. report or book lambasting management theorists as a group of publicity-seeking megalomaniacs who make far too much money and whose ideas are usually little more than common sense. There is no escape from the maelstrom of bright ideas. All moved to America. The management guru industry is largely an American one. From there it is a long trek – via PR companies. it has certainly helped to be American. too populist – its comparative youth should
. the marketing guru. (Thanks to the slow rise of a group of thinkers not based in the United States – including Europeans such as Geert Hofstede. Indeed. the American management model has dominated the twentieth century.The Ultimate Business Guru Book
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been to an event promoting a particular individual’s view of how they should be managing their business.

Even now. France’s INSEAD offered an MBA for the first time in 1959. from McGregor to Mintzberg. Between 1950 and 1982. The first 50 years of the century saw a handful of influential and useful management texts – works by the like of Chester Barnard. Management literature – aside from the unread and esoteric – has an even shorter history. there was a steady but unspectacular increase in numbers. In the US. the recognition and study of management as a discipline and profession is a thoroughly modern phenomenon. While management has been a fundamental activity throughout history. Look also at academia. Business schools like to give the impression of age-old permanence and wisdom but. in fact. In Europe structured study of management is even younger. the study of management is still in a fledgling state. gaining respectability and credence. Such statistics pale into insignificance when set against the centuries spent educating lawyers.
. Chicago University’s business school was founded in 1898. After the publication of Peters and Waterman’s In Search of Excellence in 1982. The august academic institutions. the business book market exploded and has continued to mushroom in size ever since.introduction not be overlooked.) It was not until 1965 that the UK’s first two public business schools (in Manchester and London) were opened. management thinking is largely a creature of the twentieth century (48 of the 50 thinkers included here were alive during the twentieth century). Only in the twentieth century has management come of age. their lineage is relatively short. New Hampshire – founded in 1900 – was the first graduate school of management in the world. Compared to most other disciplines. management has only just arrived on the scene. as sciences go. Frederick W Taylor and Henri Fayol. Then it took off. Peter Drucker’s seminal texts of this period were intellectual spectaculars rather than bestsellers. Cambridge and Oxford Universities. (The dearth of European business education was such that in 1970 only one member of INSEAD’s faculty had a business doctorate – all now do. As the thinkers in this book prove. and Harvard offered its first MBA in 1908 and established its graduate business school in 1919. have only embraced management in the last decade. Amos Tuck at Dartmouth College. Mary Parker Follett. It is easy to forget that. Tens of thousands of business titles are now published every year. management is in its infancy.

They are pliable. the bandwagon ground to an abrupt halt. After 1982. sometimes uncontrollable. just the same old notion that the new system will do the job. One trenchant critic of this sad managerial propensity is the Canadian strategy guru. even if it is foolish. New fashions come along and are grabbed. Why don’t we just stop reengineering and delayering and restructuring and decentralizing and instead start thinking?’8 The answer is simple: thinking is hard.The Ultimate Business Guru Book clerics. he said. one of the researchers. found that at the height of their popularity. Managers believe in the big idea. coverage of quality circles was ‘unreasoned. recognized institutions. between 1981 and 1982. is easy.
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Fashion slaves
Young disciplines (and their disciples) are apt to be hijacked.7 Celebrants of the latest fashion can easily become fashion victims. teachers and doctors in formal. We are supposed to get superinnovation on demand just because it is deemed necessary by a manager in some distant office who has read a book. Suddenly the coverage dried up and what there was became more questioning and increasingly negative. He was among the most critical of the reengineering fad – ‘There is no reengineering in the idea of reengineering’. unexpected directions. action. Management has proved this point with admirable gusto. said Eric Abrahamson. Henry Mintzberg. Managers retain an unquenchable desire for instant solutions that tackle all their problems in one fell swoop. This is akin to an
. soldiers. ‘What makes this finding especially sobering is that a similar process might very well occur with fashions that have a much more profound effect than quality circles did – for example downsizing’. ‘Just reification. everyone has to run around reengineering everything. Managers are as fashion conscious as narcissistic thirteen-year-olds. emotional and unqualifiedly positive’. Research into the popularity of quality circles. taken off in new. Give them a distant glimpse of a bandwagon and they will leap aboard with abandon. carried out by two Columbia University academics. But because of the hype that goes with any new management fad.

but aspiring managers cast around for recipes for success and ideas that can distinguish them from the crowd. they continue to base the majority of their decisions on instinct. They want a neat and tidy rationale. managers are human after all.introduction adolescent believing that a fashionable set of clothes will change their personality and lead them into a new world of happiness and romantic fulfillment. the reassurance that the gurus are identifying trends. Inflicting ill-advised ideas on their organization occupies the time of many thousands of managers. Managers behave very similarly when they discover a colleague who knows nothing of the latest addition to the
. Up and coming managers feel pressure to keep up-to-date with the latest thinking and fashions. there are plenty of alternatives to choose from. They want a formula or a case study before making a move. They want to be in touch. CEOs may view the latest idea with disdain. there is a degree of one-upmanship among the managerial audience. a decision-making system. The currency of Tom Peters. At the same time. feelings and fears which managers are already experiencing. but it is usually scant recompense for a sweat-drenched shirt and an uncomfortable feeling at the pit of your stomach that you are as dispensable as a piece of office furniture. perhaps. Richard Pascale or Charles Handy is insecurity and uncertainty There is. It seems that managers are in need of security and reassurance. The result can be that executives are in touch with the gurus. Forget the science.) Inevitably. if that is what you want. The gurus aren’t automatic dispensers of saccharined placebos. If your son or daughter discovers that you have never heard of the latest pop sensation they are incredulous and days of inevitable baiting follow as they bemoan your advanced age. (Though. Managers may have absorbed the latest thinking on core competencies. For some it is a fulltime job. Another paradox is that the global managerial search for security and reassurance leads managers to read books and listen to gurus whose message is anything but reassuring. but woefully out of touch with reality Fashion conscious organizations end up attempting to implement every bright idea their senior executives have recently come across – research by George Binney and Colin Williams of the UK’s Ashridge Management College found one company with 19 initiatives simultaneously underway. but are more likely to make a decision on prejudice or personal opinion rather than a smart theory.

but where is the kudos? After all. In such a global and crowded field it is often difficult to identify original instigators from followers. The executives with The Age of Unreason hovering unread above their desks are acknowledging their willingness to think. all 50 have had a significant impact on management thinking as well as on how managers manage their businesses. They explain themselves through their company cars and the stunning variety of executive perks.
. The books gathering dust on their shelves are not merely decorative. As the inventor of the latest buzzword the guru can travel the world unraveling its true meaning to enraptured audiences. though they may be professionals. to make a difference. (This does not mean that they think. Managers are addicted to jargon and gurus exploit their craving. of business and of humanity. And they seek legitimacy through the acquisition of knowledge. the guru industry is helped by the fact that.The Ultimate Business Guru Book
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managerial vocabulary. They are professionals. Their desire for self-improvement is open to ridicule. They are statements. young children do not express strong urges to become chief executives – and those that do are more likely to be taken to child psychologists than to witness their first production line in operation. Managers like to know what ‘reengineering’ means before their colleagues. Managers frequently explain themselves with their business cards and their job titles. jargon is an essential tool in the guru’s armory. folly and fashion.) For their intent alone. Even so.
The source of ideas
This book identifies 50 of the most important management thinkers. It comes with the simple caveat that no selection can be definitive. The 50 include consultants. managers the world over should be congratulated. acquire new skills or make a difference. academics and even some executives. to acquire new skills. Of course. Managers feel a need to explain themselves in a way in which lawyers or doctors do not. but it is also a fundamental part of management. managers remain slightly reticent and ill-at-ease with the worth of their profession. More broadly.

and the Indian Ghoshal). Blind faith in the American management model appears to have slipped. Japanese (Matsushita. Hofstede. noted Richard Pascale in Managing on the
. Of the modern day thinkers. there are few other credible candidates. there are only small groups of Europeans (Fayol.The Ultimate Business Guru Book • • • • • • • • • • • • • • • • • Rosabeth Moss Kanter Philip Kotler Ted Levitt Kurt Lewin Douglas McGregor Abraham Maslow Elton Mayo Michael Porter Richard Pascale Laurence Peter John Naisbitt Henry Mintzberg Edgar Schein Peter Senge Alvin Toffler Fons Trompenaars Max Weber
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Historical influences (2) • Nicolo Machiavelli • Sun-Tzu There are a number of interesting things about this list. The second feature is the American dominance. The most obvious feature is that there are only two women (Mary Parker Follett and Rosabeth Moss Kanter). Parkinson and Trompenaars). Handy. Lilian Gilbreth and Britain’s Rosemary Stewart are the only three others who come to mind and the input of all three was significant but limited. In truth. Morita and Ohmae) and a small number of others (the Australians Mayo and Henderson. Jane Mouton. If you make such a selection in 20 years’ time I suspect it would be radically different with more women and more non-Americans. ‘American managerial history is largely inward-focused and self-congratulatory’.

Little wonder then that business schools fall over themselves to attract the intellectual thought leaders. Tomorrow’s gurus are scattered around the world and Europe is growing in intellectual influence. Big names are traded and hawked. such as Chan Kim. The same commonsensical rule applies to business schools. is home to Sumantra Ghoshal and Arie de Geus. London Business School’s Don Sull. an American. It is an obvious commercial fact that consultants who appear to be a step ahead of the game will attract more clients. business schools can point to a lengthy pedigree of innovative research that has unquestionably changed management. ‘There is a European school of theory which is much less deterministic than American models. Not only is the business more aggressively marketed and unashamedly populist. I also anticipate that the growing influence of consultants will lead to their increasing domination of the market in ideas. as well as hosting forays from visiting professor Gary Hamel. (Other leading thinkers prefer to acquire visiting professorships depending on their vacation preferences. Some are poached – Sumantra Ghoshal’s move from INSEAD to London Business School was one instance of a big name taking the bait. Recent years have seen a radical change in the ideas industry. the businesses of both consultants and business schools are ideas driven. For management consultants. The annual meeting of the American Academy of Management was compared by one senior academic to an ‘intellectual meat market’. for example. A school that has a reputation for being genuinely innovative and fresh in its thinking and its insights has a headstart on one that simply follows in the wake of others. in addition to long-established luminaries like Yves Doz and Henry Mintzberg. a fresh insight is highly marketable. but the source of the best ideas has shifted from business schools to consultancies.introduction Edge. It is concerned with creating things dynamically and there is a critical mass of people who think along similar lines. France’s INSEAD is home to rising stars.) Amid the brain drains and brain gains. Clearly. Early management theorists such as Chester Barnard and Mary Parker Follett had strong
.’ says one of the new generation of thinkers. London Business School. It can speedily be integrated into a package sold en masse to companies. The result is a merry-go-round of business school academics.

Ed Schein and Lester Thurow. Undoubtedly there remains a nucleus of highly original thinkers at the world’s business schools. Porter et al. marketing guru Ted Levitt. Kanter. Elsewhere. Here. Rosabeth Moss Kanter. Charles Handy came to theorizing at MIT and was then at London Business School. The human relations school of the late 1950s was inspired by MIT-based Douglas McGregor who attracted the likes of Warren Bennis. which effectively launched the subject into public consciousness. Ed Schein and Chris Argyris to his team. Other notables. Just-in-Time and other techniques. there are comparatively few influential books on the subjects written by business school academics. the duo were McKinsey consultants.The Ultimate Business Guru Book
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academic connections. A review of the significant management ideas of the 1980s and 1990s quickly reveals that most had their origins in management consultancies rather than in business schools. spawned by Peters and Waterman’s bestselling In Search of Excellence. The present Harvard group – Kotter. such as Henry Mintzberg and Philip Kotler. Excellence led to the quality movement of the 1980s. despite the names and brains. Chris Argyris. – have repeatedly broken new ground and are genuinely influential. the business schools can claim to have played the leading role. In fact. First came what could loosely be termed ‘excellence’. of the great management theorists. London Business School can boast the formidable Ghoshal. At the time of researching and writing the book. Joseph Juran and Philip Crosby were more likely to be sneered at by business schools than welcomed into the fold. And yet. are business school based. Michael Porter. Peter Drucker is the only – but a significant – exception: Drucker has resolutely eschewed the temptation of a big name business school. The likes of W Edwards Deming. recent history has seen business schools gradually lagging behind in the war of ideas. Then came the concept of the learning organization. at least. Harvard’s near neighbour MIT can point to the influence of Peter Senge. Despite the fact that many business schools now run programs and courses on quality. as well as having Gary Hamel as a visiting professor. Once again its inspirations came from outside business schools. and John Kotter. These include Alfred Chandler in the 1960s. TQM. The bestselling The Fifth Discipline. Harvard Business School alone has a lengthy lineage of original thinkers. was
.

It claims. (Tom Peters has pointed out that a lot of the material in In Search of Excellence was actually dug up from research that lay buried in business schools. While academics dealt in theories. Consultants sought to distance themselves from the ivory towers of academia. The reverse is also equally true: business schools are very good at coming up with ideas and then burying them in the same way as dogs bury particularly tasty bones. To put this in perspective. It is estimated that McKinsey now spends between $50 and $100 million a year on ‘knowledge building’.) Conversion to the need to combine implementation with theory has not come cheaply. In the last five years only Hamel and Prahalad’s Competing for the Future was pioneering. The 1990s. consultants proclaimed themselves to be masters of implementation. one that could be easily converted into a package and given the hard sell. however. The current fascination with knowledge management and intellectual capital is also manna for consultants. Reengineering was a classic consulting big idea. This is undoubtedly true. (This conveniently overlooked the fact that management consultants for top firms are recruited from business schools.introduction written by MIT’s Peter Senge. theory and practice appear more closely intertwined. London Business
. (This has not made it any easier for bright ideas to become best practice – look at reengineering. Business school research – often written in tortuous prose – is published via academic journals and expensive research reports with limited circulations. The business school defense to accusations that their ideas have dried up is that consultants are highly adept at taking academic work and popularizing it. somewhat dauntingly. The entire concept could also be seen as building on the work of Chris Argyris at Harvard. Wharton and Stanford combined.) In the past consultants and educators tended to view each other with skepticism and not a little snobbery.) Thanks to the fact that the consultants are generating new ideas. The business bestseller lists are bereft of big business school names. have seen a steady procession of big ideas generated by consultants rather than business schools. It is notable that of the three books currently boasting the title Intellectual Capital none came from business schools. successful and business school generated. to spend more on research than Harvard.

innovation and the effective implementation of strategy.’9 Even so. ‘There is a lot of brilliant translation. Under continual pressure. Michael Porter. After all. Similarly. it is possible to envisage an elite of business schools continuing with highquality research while the remainder follow behind as interpreters and translators.5 million – and LBS is unquestionably one of the leading sources of business school research. the borders between consulting and business schools are likely to become even more blurred in the near future. has his own consulting company. time and opportunity to study the implications of their work more thoroughly and systematically. but it is not systematic and their work is limited. This could be mutually beneficial. academics could benefit from closer contact with the immediacy of consulting work. Ashridge Management College.’ counters London Business School’s Research Dean. Monitor. Looking to the future. It is also possible to foresee far greater movement between the worlds of consulting and business schools than ever before. Kanter’s Harvard colleague. the fact that consultants and business schools are moving closer together in a variety of ways has implications for the generation of ideas. and Gary Hamel has Strategos. ‘Bestselling books by consultants get attention and appear to be unearthing new ideas. Some of the big names run their own consulting companies. for example. Consultants learn from experience and then generalize. When you trace ideas back you usually find yourself with academic research. Ideas such as organizational culture or empowerment weren’t invented by consultants. as they shuttle from project to project. Rosabeth Moss Kanter of Harvard Business School is also co-founder and chairman of Goodmeasure. as well as spending time at London Business School. Clearly. You shouldn’t confuse midwifery with conception. has its own consulting company. The result could be a more balanced output of ideas with business schools re claiming their place as
. it is well established for many business school academics to top up their academic salaries with consulting work. which specializes in organizational change.The Ultimate Business Guru Book
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School’s annual revenue from its research activities is a relatively meager £4. consultants would benefit more from being given the space. but usually the consultants are midwives. Professor Nicholson.

thinkers hunt in pairs. Organization.’ noted The Economist. it is unlikely that the flood of ideas will come to a halt. The Economist.
4 5
. Peter R.
The selection
For ease of reference. the Appendix features a further selection of thinkers who also deserve a place in the business hall of fame. New York. A full list of each of their publications is given in the Bibliography at the end of the book.introduction factories of ideas rather than becoming producers of executive programs. In some cases. Correspondence with the author. ‘Managing the public sector’. one partner receives more attention. 1954. And. and Salaman. The Practice of Management. organize their offices and master their emotions. whatever your views on their originality or capacity for self-marketing. Harper & Row.
The selection of 50 is open to question and discussion. I have treated writing duos as two individuals and given both separate entries. Stuart Crainer March 1998
Notes
1 2 3 ‘In defence of the guru’. Vol. To avoid duplication. By way of consolation and additional information (and as a result of plain indecision). Timothy. ‘The management guru as organizational witchdoctor’. key ideas and main publications. dates. ‘Politicians are asking management theorists how to plan their day. Whatever their source. Graeme. The Ultimate Book of Business Gurus is organized alphabetically by thinker. On the title page of each section there is a brief résumé of their occupation. 26 February 1994. 20 May 1995. November 1997. Clark. 3 (1). They are even asking them how to think about the world. the business gurus will continue to be the richest vein of bright ideas. 1996. The section on each thinker seeks to cover their career and central ideas. Drucker.

’’ Igor Ansoff American academic and consultant Born 1918
Breakthrough ideas
Strategic management Gap analysis Synergy
Key book
Corporate Strategy
. a combination of products and markets is selected for the firm.Igor Ansoff
‘‘The end product of strategic decisions is deceptively simple. This combination is arrived at by addition of new product markets. and expansion of the present position. divestment from some old ones.

(When interviewed by the Lockheed CEO. Ansoff believed that there was ‘a practical method for strategic decision making within a business firm’ which could be made accessible to all.). while the theory lay largely unexplored. says Ansoff. Ansoff trained as an engineer and mathematician. Ansoff’s experiences at Lockheed provided the impetus for his first foray into the murky waters of corporate strategy.1 initially in the mathematics department. ad hoc concept. It was practiced. He then taught at Vanderbilt University and at the European Institute for Advanced Studies in Management in Belgium.) From
. The end product was his first – and most important – book. consumed half a case of Scotch and contemplated strategy. The CEO did not know even though this was the strategy the company was then pursuing. ‘The timing of my move to industry was fortuitous. US International University in 1983 where he is now Distinguished Professor of Strategic Management. and then the Lockheed Corporation where he was a vice-president. strategic planning was a barely understood. ‘It occurred at a time when American industry was increasingly confronting environmental discontinuities and turbulence. After leaving Brown University.The Ultimate Business Guru Book
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Igor Ansoff (born 1918) was one of the key figures in the formulation of a clear concept of strategic management. Ansoff had asked what was meant by diversification. in which he sought to make sense of the broader implications of what he had learned at Lockheed. The result was a rational model by which strategic and planning decisions could be made. he worked for the RAND Corporation. He joined the San Diego-based. because it influenced my ultimate career path’. A creature of its times. Corporate Strategy. Ansoff’s work struck a chord. the model concentrated on corporate expansion and diversification rather than strategic planning as a whole. On a vacation Ansoff grew a beard. joining Carnegie – Mellon’s Graduate School of Business Administration. Until then. my experience at Lockheed focused my attention and trained me to deal with the problem of managing organizations in the face of environmental discontinuities which became the central focus of my attention during the following 30 years. As a result.v.’ In 1963 he left industry for academia. Following on from the work of Alfred Chandler (q.

an intricate and somewhat daunting sequence of decisions. identify where you wish to be. optimizes a firm’s profitability through efficient production. the incidence of strategic planning failure should not have been surprising. thinkers argue that solutions are ever more elusive – ‘Strategic planning. as opposed to analysis. more than attempting to answer them’. is about posing questions. in the formulation of strategy. it was a practical invention designed by staffs in business firms as a solution to a problem which was poorly understood. Ansoff regarded strategic management as ‘the part of management which develops a firm’s future profit potential by assuring that it does business in markets which have the potential of satisfying its objectives. Ansoff examined ‘corporate advantage’ long before Michael Porter cornered the field 20 years later. After all. Ansoff himself has honestly admitted that his early model was overly analytical. Ansoff ‘s work can appear excessively analytical and highly prescriptive. distribution and marketing its products/services generated by strategic management’. Early converts to strategic planning as outlined by Ansoff found that ‘paralysis by analysis’ was a very real threat. In an era where corporate change is increasingly recognized as a fact of life. Ansoff’s model was better suited to a world of answers than one beset by turbulence and uncertainty. and identify tasks which will take you there. ‘In retrospect. and in the absence of a theory which could have guided the design. and that it offers them in a way which assures it a competitive advantage’. that it offers products/services which these markets want. Central to this was the reassuringly simple concept of gap analysis: see where you are. He distinguished this from what he called operating management – ‘the part of management which.’ Ansoff has reflected. To the contemporary observer. at best. Over the last 30 years. Along the way he has fuelled a continuing debate with the likes of Henry Mintzberg on the role of creativity and intuition. Ansoff has worked steadfastly on honing his model so that strategic planning could become a universally available management tool.Igor Ansoff
3
this emerged the Ansoff Model of Strategic Planning. Richard Pascale suggests. using the profit potential. He explained it with uncharacteristic brevity as ‘2 + 2 = 5’. Ansoff can also lay claim to introducing the word ‘synergy’ into the management vocabulary. In addition.
.

1984. Prentice Hall.
.The Ultimate Business Guru Book
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Notes
1 RAND.
Bibliography
Corporate Strategy. Macmillan. 1965. was an American military thinktank established after the war. Implanting Strategic Management. 1979. McGraw Hill. Strategic Management. London. London. an acronym for Research and Development. New York.

they have never learned how to learn from failure. And because they have rarely failed.’’ Chris Argyris American academic Born 1923
Breakthrough ideas
Organizational learning Single and double loop learning
Key books
Personality and Organization Organizational Learning
.Chris Argyris
‘‘Because many professionals are almost always successful at what they do. they rarely experience failure.

dark-complexioned. Argyris believed. Argyris’ early work concentrated on the then highly innovative field of behavioral science. says Art Kleiner in The Age of Heretics. Chris Argyris’ work is driven by a fundamental – some would say flawed – faith in human L nature. as if he was overjoyed at the chance to test himself’. Personality and Organization has become one of the subject’s classic texts. almost despite himself. in many organizations is that the organization itself stands in the way of people fulfilling their potential. His style of debate was analytical – indeed. and slender. the riddles of human nature. Indeed. economics and organizational behavior. His qualifications embrace psychology. and should be. He is now the James Bryant Conant Professor of Education and Organizational Behavior at Harvard Business School. to break into a delighted grin when arguments grew hot. Prior to joining Harvard he was at Yale where he was a professor of administrative science. ‘He was bespectacled. The task for the organization is to make sure that people’s motivation and potential are fulfilled and well-directed. Harvard Business School. his approach to life was passionately devoted to inquiry. ‘His voice was distinctively mildmannered and reedy with a slight European tinge. Argyris
. The problem.The Ultimate Business Guru Book
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Lean and ascetic of appearance. Central to his process of inquiry has been the entire concept of learning. related to work. with a narrow face that tended. and theory. his 1957 book. particularly in organizations?’1 These are questions which Argyris has continued to ask with dogged persistence. Argyris was part of the human relations school of the late 1950s and involved in the work of the National Training Laboratories which had a mesmeric attraction for a host of other important thinkers. Argyris argued that organizations depend fundamentally on people and that personal development is. Argyris was brought up in the New York suburbs and spent some time in Greece with his grandparents. His romantic optimism is bolstered by his considerable intellect. why did people fail to live up to their own professed ideals? Why was so much human behavior so self-frustrating. a post he has held since 1971. reasoning. In particular. Argyris (born 1923) is a formidable thinker – even by the lofty standards of his employer. But he was drawn to the kinds of problems that most analytical people eschew.

consultants and other ‘Professionals’ – who often prove the most inadequate at actually doing so. Model 2 organizations emphasized ‘double-loop learning’ which Argyris and Schön described as ‘when organizational error is detected and corrected in ways that involve the modification of underlying norms. policies. but if learning is to persist managers and employees must also look inward. so they focus on identifying and correcting errors in the external environment. and their 1978 book. Indeed. A virtuous circle
. In Model 1 managers concentrate on establishing individual goals. The first was based on the premise that we seek to manipulate and form the world in accordance with our individual aspirations and wishes. Model 1 organizations are characterized by what Argyris and Schön labeled ‘singleloop learning’ (‘when the detection and correction of organizational error permits the organization to carry on its present policies and achieve its current objectives’). They learn from others. In Model 2 organizations. In contrast. They debate issues and respond to. but resist any attempt to change their own thinking and working practices. Schön. produced some original perspectives on age old problems.2 Problems with learning. as Argyris has revealed. Solving problems is important. are not restricted to a particular social group. They need to reflect critically on their own behavior. both in individual and corporate terms. and objectives’.’ he says. Theory in Practice. They keep to themselves and don’t voice concerns or disagreements. The onus is on creating a conspiracy of silence in which everyone dutifully keeps their head down. managers act on information. His most influential work was carried out with Donald Schön (most importantly in their 1974 book. The combination of the psychologist. Argyris. change.Chris Argyris has examined learning processes. and the more philosophical. Defense is the prime activity in a Model 1 organization though occasionally the best means of defense is attack. in huge depth. and are prepared to. it is the very people we expect to be good at learning – teachers. Organizational Learning). Model 1 managers are prepared to inflict change on others.3 Argyris and Schön originated two basic organizational models. ‘Most people define learning too narrowly as mere problem solving.

‘Any company that aspires to succeed in the tougher business environment of the 1990s must first resolve a basic dilemma: success in the marketplace increasingly depends on learning. they tend to fall apart. What’s more. in fact. While defensiveness has remained endemic.’
As Argyris has repeatedly exposed. The riddle of human nature remains as intractable as ever. ‘There seems to be a universal human tendency to design one’s actions consistently according to four basic values: 1. ‘inquiring into the learning system by which an organization detects and corrects its errors’. To suppress negative feelings.
. on such patterns of behavior are organizations built. This did not temper the rigor of his output or of his arguments. his work became slightly more fashionable. not very good at it. concluded Argyris and Schön. When suddenly faced with a situation they cannot immediately handle. 3.The Ultimate Business Guru Book
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emerges of learning and understanding. The questions remained. To maximize winning and minimize losing. 2. yet most people don’t know how to learn. 4. and Chris Argyris’ curiosity appears undiminished. With the return of learning to the corporate agenda in the early nineties. ‘Most organizations do quite well in singleloop learning but have great difficulties in double-loop learning’. This was ‘deutero-learning’.’ he noted in a Harvard Business Review article. In addition.4 The challenge – and mystery – of learning remains profound. Argyris and Schön proposed a final form of learning which offered even greater challenges. those members of the organization that many assume to be the best at learning are. corporate fashions have moved Argyris’ way. and To be as rational as possible – by which people mean defining clear objectives and evaluating their behavior in terms of whether or not they have achieved them. ‘Many professionals have extremely brittle personalities. To remain in unilateral control.’ he says.

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In a community all acts of individuals and of organizations are directly or indirectly interconnected and interdependent.Chester Barnard
‘‘I rejected the concept of organization as comprising a rather definite group of people whose behavior is co-ordinated with reference to some explicit goal or goals.’’ Chester Barnard American executive 1886–1961
Breakthrough ideas
The nature and scope of executive roles Company/executive relationship
Key book
The Functions of the Executive
.

and. to promote the securing of essential efforts. Though he was the archetypal corporate man. To Barnard the chief executive was not a dictatorial figure geared to simple short–term achievements. Barnard also found time to lecture on the subject of management.
. collected together his lectures. He retired in 1952. but comprehensive. the approach ornate. arguing that ‘in a community all acts of individuals and of organizations are directly or indirectly interconnected and interdependent’. first. third. Fortune Magazine hailed Barnard as ‘possibly [having] the most capacious intellect of any business executive in the United States’. second. part of his responsibility was to nurture the values and goals of the organization. Barnard won an economics scholarship to Harvard. He also advocated lines of communication that were short and direct. The language is dated.) Indeed. ‘The essential functions are. He spent his entire working life with the company. he wrote. Barnard’s interests were varied. eventually becoming President of New Jersey Bell in 1927. (It was last resurrected by Peters and Waterman in their 1982 bestseller In Search of Excellence who noted: ‘Its density makes it virtually unreadable. The Functions of the Executive. During World War II. For example. Chester Barnard’s best known book. The book continues to attract occasional outbursts of appreciation when discovered by modern thinkers. but before finishing his degree he joined American Telephone and Telegraph to begin work as a statistician. much of what Barnard argued strikes a chord with contemporary management thinking. to provide the system of communications. nonetheless it is a monument’. Instead. Barnard took what would today be called a holistic approach. to formulate and define purpose’. he worked as special assistant to the Secretary of the Treasury and co-wrote a report which formed the basis of US atomic energy policy. Barnard argued that values and goals need to be translated into action rather than meaningless motivational phraseology.The Ultimate Business Guru Book
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Chester Barnard (1886–1961) was a rarity: a management theorist who was also a successful practitioner. he highlighted the need for communication – he believed that everyone needs to know what and where the communications channels are so that every single person can be tied into the organization’s objectives.

Chester Barnard
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Barnard regarded the commercial organization simply as a means of allowing people to achieve what they could not achieve when merely individuals. MA. Even so. Organization and Management.
. to one also concerned with more elusive. For all his contemporary sounding ideas. Barnard played an important part in broadening the managerial role from one simply of measurement. Harvard University Press. MA. Harvard University Press. abstract notions.
Bibliography
The Functions of the Executive. wrote Barnard. In arguing that there was a morality to management. there was a hint of Taylor’s Scientific Management in such observations. Cambridge. Barnard proposed a moral dimension to the world of work (one which Taylor certainly did not recognize). Barnard was a man of his times – advocating corporate domination of the individual and regarding loyalty to the organization as paramount. He defined an organization as a ‘system of consciously co-ordinated activities of forces of two or more persons’. 1938. such as values. 1948. ‘The distinguishing mark of the executive responsibility is that it requires not merely conformance to a complex code of morals but also the creation of moral codes for others’. Cambridge. Not surprisingly given the era in which Barnard lived. control and supervision.

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Warren Bennis
“The new leader is one who commits people to action.” Warren Bennis American academic and administrator Born 1925
Breakthrough ideas
Leadership as an accessible skill Adhocracy as an antidote to bureaucracy
Key books
Leaders An Invented Life Organizing Genius
. and who may convert leaders into agents of change. who converts followers into leaders.

‘When I was at the University of Cincinnati I realized that I was seeking power through position.The Ultimate Business Guru Book
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Perpetually tanned. mass audience. writing. Bennis became a futurologist in the 1960s. I wanted to be a university president but I didn’t want to do it. Germany. To many he is simply the regular Presidential adviser who brought leadership to a new.’ Returning home. But there is more to Bennis than that. Douglas McGregor. he was confronting realities as a university administrator at the State University of New York at Buffalo and as President of the University of Cincinnati. Along the way he has made a contribution to an array of subjects and produced a steady stream of books including the bestselling. Organizing Genius: The Secrets of Creative Collaboration. Bennis was the youngest infantry officer in the European theatre of operations during World War II. Warren Bennis (born 1925) appears the archetype of the Californian popular academic. Now we can have our lives back. I was on patrol duty in Heidelburg. He recalls the war’s end –’On August 6 1945. with a shining white-toothed smile. I was talking to an enlisted man who said that we’d unloaded a super bomb in Japan.’
. consulting and administration. His lengthy career has involved him in education. He found that his practice disappointed his theory – a rare example of an academic putting his reputation where his ideas are. Now in his seventies. he went to Antioch College as an undergraduate and fell under the influence of his mentor.1 From being an early student of group dynamics in the 1950s. Leaders. Bennis envisaged organizations as adhocracies – roughly the direct opposite of bureaucracies – freed from the shackles of hierarchy and meaningless paperwork. by being President of the university. Bennis followed McGregor to MIT.’ recalls Bennis.) While Bennis was mapping out potential futures for the business world. I moved from there to T-Groups. among others. ‘My early work was on small group dynamics. creator of the motivational Theories X and Y Later. and most recently. he said. more a classical area of social psychology. I wanted the influence. His work –particularly The Temporary Society (1968)– explored new organizational forms. We were all set to go to Japan. (The term was later used by Alvin Toffler. sensitivity training and then into change in social systems.

He is now based at the University of Southern California where he is founder of the University’s Leadership Institute in Los Angeles. Bennis’ best known leadership research involved 90 of America’s leaders. ‘My first major article came out in 1959 and was on leadership. leaders are usually ordinary people – or apparently ordinary – rather than charismatic. These included Neil Armstrong. the coach of the LA Rams. Concern and interest about leadership development is no longer an American phenomenon. fitting in instead of standing out. It is truly global. People who cannot invent and reinvent themselves must be content with borrowed postures.’ Bennis returned to the other side of the academic fence. ‘leadership has become a heavy industry. Bennis admits. finally.’ With the torrent of publications and executive programmes on the subject. he says in the autobiographical collection. Since then. despite his varied career – and life – Bennis remains inextricably linked with the subject of leadership have been thinking about leadership almost as long as I have been thinking’. and. At the age of 72 I would like to open more doors for people. he admits. leaders are made rather than born. and
.’ Bennis’ work stands as a humane counter to much of the military-based. I looked out of the window and thought that the man cutting the lawn actually seemed to have more control over what he was doing. An Invented Life 3 ‘It is probably a trap of my own making’.Warren Bennis
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says Bennis. Explaining the pattern of his career. leadership is not about control.’2 Yet. orchestral conductors. direction and manipulation. secondhand ideas. leadership is not solely the preserve of those at the top of the organization – it is relevant at all levels. hero worship which dogs the subject. It makes life a little simpler. You build up some sort of brand equity and there is a degree of collusion between that and the marketplace – people say leadership that’s Bennis. Bennis argues that leadership is not a rare skill. Bennis reflects: ‘I am voraciously curious. Since 1985 most of my work has been in that area. it is easy to forget that leadership had been largely forgotten as a topic worthy of serious academic interest until it was revived by Bennis and others in the 1980s. ‘In the end I wasn’t very good at being a president.

fat and thin. commitment and challenge but. From the 90 leaders. Leaders have to be seen to be consistent. taking risks. even close contacts. and an ability to do without constant approval and recognition. above all. Instead. “They were right brained and leftbrained. Having a vision is one thing. said Bennis. The second skill shared by Bennis’ selection of leaders is management of meaning – communications. and of self. There’s no opportunity to learn from adversity and problems. says Bennis. optimism and hope.
. Bennis believes effective communication relies on use of analogy. of meaning. metaphor and vivid illustration as well as emotion.’ Successful leaders have a vision that other people believe in and treat as their own. Management of attention. tall and short. with courteous attention. of trust. a capacity to approach things in terms of only the present. converting it into successful action is another. ‘The learning person looks forward to failure or mistakes’.’ The leaders have a positive self regard. trust. assertive and retiring. learning.The Ultimate Business Guru Book
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businessmen such as Ray Kroc of McDonald’s. Indeed. The third aspect of leadership identified by Bennis is trust which he describes as ‘the emotional glue that binds followers and leaders together’. he uses a definition of leadership as: ‘The capacity to create a compelling vision and translate it into action and sustain it. four common abilities were identified: management of attention. willingness to treat everyone. ‘The worst problem in leadership is basically early success. an ability to trust others even when this seems risky. said Bennis. The leaders do not glibly present charisma or time management as the essence of their success. Bennis’ message was that leadership is all-encompassing and open to all. what Bennis labels ‘emotional wisdom’. participative and autocratic’. This is characterized by an ability to accept people as they are. The final common bond between the 90 leaders studied by Bennis is ‘deployment of self’. the emphasis is on persistence and self-knowledge. articulate and inarticulate. is a question of vision. dressed for success and dressed for failure. A vision is of limited practical use if it is encased in 400 pages of wordy text or mumbled from behind a paper-packed desk.4 The link between them was that they had all shown ‘mastery over present confusion’.

but they give the lie to the persistent notion that successful institutions are the lengthened shadow of a great woman or man. the group behind the 1992 Clinton campaign. These are exceptional groups with great intensity who had belief in their collective aspiration. acting alone. too. and eagerly sign up. It’s not clear that life was ever so simple that individuals. Inevitably.’ Indeed. Typically. by making the vision so palpable and seductive that they see it. The standard models. the leader has to invent a leadership style that suits the group. the leader is the one who recruits the others.’ says Bennis. Bennis has switched his attention to the dynamics of group working.’
. especially command and control. a person with an original but attainable vision. The groups are a series of vivid utopias whether they are Xerox’s Palo Alto Research Center. I’m not sure how useful it is to business people. ‘Greatness starts with superb people. He prefers the terminology of groups rather than the more fashionable teams –’Teams has a Dilbertian smell to it. Lockheed’s Skunk Works or the Manhattan Project which invented the atomic bomb’. ‘The Lone Ranger is dead. None of us is as smart as all of us. but never arbitrarily.Warren Bennis
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Most recently. Everyone is talking about teams and there is a lot of bullshit written. the heroic view of the leader as the indomitable individual is now outdated and inappropriate. They have to make decisions without limiting the perceived autonomy of the other participants. The relationship between groups and their leaders is clearly of fundamental interest to Bennis. I think you can learn more from extraordinary groups than the run of the mill. simply don’t work. ‘He or she is a pragmatic dreamer. Devising and maintaining an atmosphere in which others can put a dent in the universe is the leader’s creative act. Instead of the individual problem solver we have a new model for creative achievement. Ironically. the leader is able to realize his or her dream only if the others are free to do exceptional work. The heads of groups have to act decisively. solved most significant problems. People like Steve Jobs or Walt Disney headed groups and found their own greatness in them. Great Groups don’t exist without great leaders.

Warren. MA. Addison-Wesley. Bennis puts up a resolute and spirited defense: ‘If a romantic is someone who believes in possibilities and who is optimistic then that is probably an accurate description. He is a humanist with high hopes for humanity. 1989. lead to the best organizations. Addison-Wesley. 2nd edn). 1993. 1993. Rinehart & Winston. New York. Holt.’
Notes
1 2 3 4 Interview with author. Quoted in Crainer.’ To accusations of romanticism. A Great Group is more than a collection of first-rate minds. in the long run. ‘Most organizations are dull and working life is mundane.
Bibliography
The Planning of Change (with Benne K. Reading.
. But it shows you the possibilities. On Becoming a Leader. MA. MA. these groups could be an inspiration. Stuart. Why Leaders Can’t Lead. It’s a miracle.D. Addison Wesley.. people said it is not real life. October 1988. & Chin. An Invented Life. There is no getting away from that. San Francisco. Harper & Row. Bennis. An Invented Life: Reflections on Leadership and Change. Reading. Wokingham. The Director. Organizing Genius (with Patricia Ward Biederman). ‘Doing the right thing’. With T-Groups in the fifties. 1989. I’m more and more convinced that individual leaders can create a human community that will. I have unwarranted optimism. So.The Ultimate Business Guru Book
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There is a rich strand of idealism which runs through Bennis’ work. Reading. 1970. ‘Profile of Warren Bennis’. 1985. Jossey-Bass. 1997. Addison Wesley. By looking at the possibilities we can all improve. R. CA. Leaders: The Strategies for Taking Charge (with Burt Nanus). December 1997 (as are all other quotations unless otherwise attributed). I think that every person has to make a genuine contribution in their lives and the institution of work is one of the main vehicles to achieving this. Organization Frontier 93/3.

Marvin Bower
“In all successful professional groups.” Marvin Bower American management consultant Born 1903
Breakthrough ideas
Corporate culture and values Teamworking and project management Professionalization of management consulting
Key books
The Will to Manage The Will to Lead
. regard for the individual is based not on title but on competence. stature and leadership.

While few claims can be made for Bower as an outstandingly innovative thinker. Bower was a Harvard–trained lawyer.2 Throughout the 1940s and 1950s. Interestingly. Amsterdam. the profits would look after
. and the firm was a ‘practice’ rather than a business. he was a rigorous setter of standards and an extraordinarily successful practitioner. Zurich and Milan. ‘The entire ethos of McKinsey was to be very respectable. Paris. McKinsey left to run Marshall Field & Company. In 1939 the two split with Kearney setting up a new company in his own name. He died in 1937 and this left Bower in the company’s New York office and A.1 Consequently. we could not work with them’. said Bower. That’s the enduring legacy of Marvin Bower.The Ultimate Business Guru Book
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Marvin Bower (born 1903) is the man who did more than any other to create the modern management consulting industry – perhaps only Bruce Henderson of the Boston Consulting Group can come close to Bower’s long lasting impact at McKinsey & Company.T. McKinsey had 74 offices in 38 countries. the kind of people CEOs naturally relate to. recent years have also seen the structure and managerial style of the company receiving plaudits.’ says former McKinsey consultant George Binney. It opened its first overseas office in 1959. Bower’s gospel was that the interests of the client should precede increasing the company’s revenues. originally from Cleveland. Dusseldorf. Under Bower’s astute direction McKinsey became the world’s premier consulting firm. Kearney in the Chicago office. Marvin Bower joined the fledgling firm of James O McKinsey (1889–1937) in 1933 at a time when management consulting was still called ‘management engineering’. Soon after Bower’s arrival. ‘Unless the client could trust McKinsey. ‘My vision was to provide advice on managing to top executives and to do it with the professional standards of a leading law firm’. followed by Melbourne. McKinsey consultants were ‘associates’ who had ‘engagements’. rather than mere jobs. If you looked after the client. In 1997. said Bower. Bower did not change the name of his firm as he shrewdly decided that clients would demand his involvement in projects if his name was up in lights. McKinsey expanded in North America.

McKinsey consultants know where they stand. labels Bower as ‘one of the finest leaders in American business ever’ and says that ‘he led that firm according to a set of values. it says. Even now. for some reason. American Express chief Harvey Golub. Teams were assembled for specific projects. To this he added a few idiosyncratic twists such as insisting that all McKinsey consultants wore hats – except. he created an impression of hard working.3 Bower also changed the company’s recruitment policy. an ex-McKinsey consultant. Bower managed to stand apart. The firm’s policy remains one of the most simple. according to McKinsey. Instead of hiring experienced executives with in-depth knowledge of a particular industry. ‘McKinsey had a culture that fostered rigorous debate over the right answer without that debate resulting in personal criticism’. but a simple and effective means of ensuring that clients took McKinsey seriously. and should only agree to do work which is both necessary and which they could do well. ‘Seniority in McKinsey correlates directly with achievement’. This was novel at the time but set a precedent and changed the emphasis of consulting – from passing on a narrow range of experience to utilizing a wide range of analytical and problem solving techniques. Bower’s view was that values maketh the man and the business. in the San Francisco office –and long socks. The weak are shown the door.Marvin Bower
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themselves.) Bower’s other rules were that consultants should keep quiet about the affairs of clients. once recruited. The best people in the organization were brought to bear on a particular problem no matter where they were based in the world. clean living. ‘If a consultant ceases to progress with the Firm
. should tell the truth and be prepared to challenge the client’s opinion. another McKinsey alumnus. and it was the principle of using values to help shape and guide an organization that was probably the most important thing I took away’. He thought of McKinsey as a ‘network of leaders’. decency. he began recruiting graduates students who could learn how to be good problem solvers and consultants.4 Though the management consulting world developed a high charging. recalls IBM’s Lou Gerstner. (High charges were not a means to greater profits. opportunistic reputation. True or not. Another element of Bower’s approach was the use of teams.

‘The McKinsey mystique’.
. It is obsessively professional and hugely successful.’ a McKinsey consultant once confided to Forbes magazine. The basic way of running it is the same. Marvin Bower was the creator of this organizational magic. And yet. Many companies say they want to change but they need to empower people below. The mystique of McKinsey – The Firm – is untouched. McKinsey is not the oldest consultancy company. Bower himself set an impressive example – in 1963. Business Week. Fortune.’ How McKinsey does it’. he or she is asked to leave McKinsey’. John. on reaching the age of 60. Byrne. Clean–cut and conservative. a slick. Arthur D Little can trace its lineage back to the 1880s. McKinsey laid its cards on the table. well–oiled financial machine not given to false modesty –’We do not learn from clients. 1 November 1993. There have been thousands of changes in methods but not in command and control. Interview with author. This is something which McKinsey has largely managed to sustain. McKinsey was the consulting firm to trust. but straight. More cohesion is needed rather than hierarchy. Bower’s approach was commonsensical and free of fashionable baggage. says the company’s recruitment brochure. in revenue per consultant). We learn from other McKinsey partners. It has become more than a mere consultancy. It played it hard.’ he said in 1995. ‘Business has not changed in the past sixty years. 20 September 1993. he sold his shares back to the firm at their book value. Nor is McKinsey the biggest consultancy company in the world – Andersen Consulting dwarfs it in terms of revenues and numbers of consultants (but not.The Ultimate Business Guru Book
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or is ultimately unable to demonstrate the skills and qualities required of a principal. It is an ethos. Staid suits and professional standards. significantly. McKinsey is special because it likes to think of itself as the best and has developed a selfperpetuating aura that it is unquestionably the best. John.5 The culture Bower created. Their standards aren’t high enough. continues. If Big Blue was the company to trust.
Notes
1 2 3 Huey.

Marvin Bower
4 5 Byrne. Hecht. Running a business with a network of leaders. Eurobusiness. ‘The McKinsey mystique’. The Will to Lead. Cambridge.
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Bibliography
The Will to Manage: Corporate success through programmed management. ‘The firm walks tall’. February 1995. Harvard Business School Press. 1966. Françoise. Business Week. John. McGraw Hill. 20 September 1993. 1997.
. MA. New York.

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Dale Carnegie
“Take a chance! All life is a chance. communication and motivation
Key book
How to Win Friends and Influence People
.” Dale Carnegie American consultant and author 1888–1955
Breakthrough ideas
Salesmanship. The man who goes the furthest is generally the one who is willing to do and dare.

These two examples are testament to the enduring popularity of Carnegie’s work and the truism. In 1997. 7000 students were graduating each year and the business was generating annual profits of $4 million. Realizing the limits of his acting potential. Within eight years. Carnegie did much the same 50 years before and his principles have a similar homely ring to those of Covey. remember that a person’s name is to that person the sweetest and most important sound in any language. a Taiwanese consulting company brought Dale Carnegie’s training programs to the country for the first time. first noted by Robert Louis Stevenson.’) Dale Carnegie mastered sincerity early on. It was then that Carnegie persuaded
. He turned his sales territory into the company’s national leader. over forty years after his death. sell. Carnegie (originally Carnegey) began his working life selling bacon.The Ultimate Business Guru Book
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In 1987. talk in terms of the other person’s interests. smile. Carnegie was the first superstar of the self-help genre. give honest and sincere appreciation. Dale Carnegie (1888–1955) was still featuring on the bestseller lists in Germany. If you can fake that. His successors – whether they be Anthony Robbins or Stephen Covey – should occasionally doff their caps in Carnegie’s direction. Born on a Missouri farm. of which Carnegie is a prime example. Encourage others to talk about themselves. soap and lard for Armour & Company in south Omaha. condemn or complain.’ (It is not known whether Groucho Marx was a fan of Carnegie’s. Carnegie returned to salesmanship – selling Packard automobiles. make the other person feel important – and do it sincerely. be a good listener. but he provided similar advice: ‘Sincerity is the key to success. before coming up with The Seven Habits of Highly Effective People. It is surely no coincidence that Covey studied American ‘success literature’. Carnegie presented the ‘fundamental techniques in handling people’ – ‘don’t criticize. you’ve got it made. Go forth with a smile on your face and a song in your heart and sell. First. but then went to New York to study at the American Academy of Dramatic Arts – he toured the country as Dr Harley in Polly of the Circus. sell. and arouse in the other person an eager want’. To these he added six ways to make people like you –’become genuinely interested in other people. that everyone lives by selling something.

How to Develop Self-Confidence and Influence People by Public Speaking. I have seen the application of these principles literally revolutionize the lives of many people. How to Stop Worrying and Start Living.
Bibliography
How to Stop Worrying and Start Living. Carnegie knew which levers to pull and when. 1994. Appearances can be deceptive. In his books. How to Enjoy Your Life and Your Job. Pocket Books. They continue to strike a chord with managers and aspiring managers. because they deal with the universal challenge of face-to-face communication. 1985. How to Win Friends and Influence People. promises made. They work like magic. and his perennial bestseller. How to Enjoy Your Life and Your Job. 1995. So successful. Pocket Books. How to Win Friends and Influence People. It is homespun wisdom adorned with commercial know-how. Carnegie ensured that his name and ideas should continue to live on – and make money – after his death. Incredible as it sounds. Carnegie was also notable in being the first to create a credible long-term business out of his ideas. Up–beat and laden with sentiment. Like any great salesman. How to Develop Self-Confidence and Influence People by Public Speaking.
. It is difficult to sneer at the enduring popularity of Carnegie’s books and his company’s training programs. that he turned them into a string of books – Public Speaking and Influencing Men in Business. Pocket Books. which has sold over 15 million copies. In creating a flourishing business. names were dropped.Dale Carnegie
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the YMCA schools in New York to allow him to conduct courses in public speaking. 1986.’ It is easy to sneer at Carnegie’s work – in the same way as Covey can be dismissed. Carnegie’s talks became highly successful. Pocket Books. in fact. How to Win Friends and Influence People was a simple selling document – ‘The rules we have set down here are not mere theories or guesswork. Carnegie was a salesman extraordinaire.

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James Champy
“Management has joined the ranks of the dangerous professions.” James Champy American consultant Born 1942
Breakthrough idea
Reengineering
Key book
Reengineering the Corporation
.

Champy and Hammer defined reengineering as ‘the fundamental rethinking and radical redesign of business processes to achieve dramatic improvements in critical measures of performance such as cost. The basic idea behind reengineering was that organizations needed to identify their key processes and make them as lean and efficient as possible.The Ultimate Business Guru Book
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James Champy (born 1942) co-founded the consultancy company CSC Index and was. CSC became one of the largest consultancy companies in the world with revenues in excess of $500 million and over 2000 consultants worldwide. regarding it as too limiting. They eschewed the popular phrase ‘business process reengineering’. reengineering attracted vituperative criticism. To some it was Frederick Taylor’s Scientific Management applied at an organizational rather than an individual level. True reengineering was allembracing. the thinker behind the management phenomenon of the early 1990s. along with Michael Hammer. thanks to the popularity of reengineering. As the world conspicuously failed to revolutionize itself. Their book. reengineering was more than dealing with mere processes. To Champy and Hammer. The past was dismissed as history. Champy and Hammer advocated that companies equip themselves with a blank piece of paper and map out their processes. the future was there to be shaped and coerced into the optimum shape. Having come up with a neatly engineered map of how their business should operate. Peripheral processes (and therefore peripheral people) needed to be discarded. reengineering. ‘It’s just a new
. The concept was simple. Revenues prior to the success of the book were $70 million. a recipe for a corporate revolution. Reengineering the Corporation. was a business blockbuster and. companies could then attempt to translate the paper theory into concrete reality. With reengineering Champy and Hammer promised a revolution. Little wonder perhaps that making reengineering happen proved immensely more difficult than Champy and Hammer suggested. Indeed. but it is one which – except in a few instances – largely failed to materialize. quality service and speed’. In their view the scope and scale of reengineering went far beyond simply altering and refining processes.

Often. Reflected Thomas Davenport. ‘If I want to be mean. one of its original champions. but long shackled.) For this Champy and Hammer could not be entirely blamed. But it did not lead to them or their idea being universally admired and liked. The first problem was that the blank piece of paper ignored the years. Though there was a degree of professional jealousy and sour grapes. or humane. not on vision or strategy’. It was a huge flaw. Depersonalization was one of their themes. but its philosophy is prosaic in the extreme Its focus is on corporate mechanics. every hill has a king. people were treated appallingly in the name of reengineering. Alas. as the name suggested.James Champy
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label for something that’s been around for a while’. says Peter Cohan. In some cases. curiosity’. (It not only appeared so. Id say we have situations where some people want to be on top of a hill. owed more to visions of the corporation as a machine than a human. his or her goodwill.) ‘Reengineering calls loudly for action. companies which claimed to be reengineering – and there were plenty – were simply engaging in cost-cutting under the convenient guise of the fashionable theory.’4 Reengineering became a synonym for redundancy and downsizing. often decades. observed Tom Peters.
.3 ‘Champy and Hammer ignored the importance of people’. a great deal of the criticism was justified. The human side of reengineering proved its greatest stumbling block –’Most reengineering efforts will fail or fall short of the mark because of the absence of trust – meaning respect for the individual. observed one critic. Such preconceptions and often justifiable habits were not easily discarded. said quality guru. of cultural evolution which led to an organization doing something in a certain way. (‘Reengineering didn’t start out as a code word for mindless bloodshed’. author of The Technology Leaders and a former CSC consultant. system. intelligence and native. Joseph Juran. What is more logical than to create a hill?’1 Champy and Hammer’s thirst for publicity and media attention did their businesses no harm at all. They were objects who handled processes.2 Reengineering. Downsizing appeared more publicly palatable if it was presented as implementing a leading edge concept. The second problem was that reengineering appeared inhumane.

‘Senior managers have been reengineering business processes with a passion. John. Instead of casting the reengineering net widely they tended to reengineer the most readily accessible process and then leave it at that. and the subject of Champy’s sequel. the fortunes of Champy and CSC Index also grew more troubled. The revolutionaries quickly merged with the masses.5 In response. If their jobs and styles are left largely intact.The Ultimate Business Guru Book
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The third obstacle which emerged was that corporations were not natural or even willing revolutionaries. As the corporate enthusiasm for reengineering diminished. tearing down corporate structures that no longer can support the organization. he suggested reengineering management should tackle three key areas: managerial roles. Business Week. Champy returned to the daily management of the company – a job he had left in 1992. In August 1996 Champy left CSC to join Perot Systems to lead its management consulting activities. With people in jobs for longer. Not surprisingly. but often unwilling to inflict it upon themselves. Related to this.’ Champy noted in 1994 at the height of reengineering’s popularity. managers must change the fundamentals of career development and compensation. managers were all too willing to impose the rigors of a process-based view of the business on others. 30 August 1993. Reengineering Management. ‘Bidding farewell to a guru’. compensation must be based more on the skills and knowledge they acquire.’ said Champy. managerial styles and managerial systems. Champy’s agenda for management echoed that of a number of other thinkers. not on their position on the organization chart. In 1995 Business Week suggested that the authors of The Discipline of Market Leaders. had bought large numbers of their book to secure a place in the bestseller lists.
Notes
1 Byrne. Yet the practice of management has largely escaped demolition. managers will eventually undermine the very structure of their rebuilt enterprises.6 In retrospect. two CSC consultants. reengineering usually failed to impinge on management.
. the mistake of reengineering was not to tackle reengineering management first. ‘With fewer job descriptions and less hierarchy.

Sears Roebuck. Chandler has not followed the modern fashion for dismissing large organizations. Chandler observed that organizational structures in companies such as Du Pont. He has been Straus Professor of Business History at Harvard since 1971. the UK and Germany from the 1880s until the 1940s. Chandler’s middle name.
. somewhat unusually. in fact. for example. Indeed he has challenged the conventional belief that small companies have a monopoly on innovation and dynamism. General Motors and Standard Oil were driven by the changing demands and pressures of the marketplace. He traced the market-driven proliferation of product lines in Du Pont and General Motors and concluded that this proliferation led to a shift from a functional. Chandler praised Alfred Sloan’s decentralization of General Motors in the 1920s.The Ultimate Business Guru Book
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Alfred Chandler (born 1918) is a Pulitzer Prize-winning business historian. Chandler’s family has historical connections with DuPont – and DuPont is. He was later influential in the transformation of AT&T in the 1980s from what was in effect a production-based bureaucracy to a marketing organization. Chandler compared and contrasted the growth of the largest 200 companies in the US. While in 1950 around 20 percent of Fortune 500 corporations were decentralized. After graduating from Harvard. information and even psychological commitment for long-term planning and appraisal’.) Chandler was highly influential in the trend among large organizations for decentralization in the 1960s and 1970s. (Interestingly. this had increased to 80 percent by 1970. monolithic organizational form to a more loosely coupled divisional structure. a historian at MIT in 1950. At the time DuPont also controlled General Motors. In his earlier work. Later he became Professor of History at Johns Hopkins University. he served A in the US Navy before becoming. In his 1990 book. Strategy and Structure. Chandler argued that the chief advantage of the multi-divisional organization was that ‘it clearly removed the executives responsible for the destiny of the entire enterprise from the more routine operational responsibilities and so gave them the time. In his classic book. Chandler’s hugely detailed research into US companies between 1850 and 1920 has formed the cornerstone of much of his work. Scale and Scope.

’1 Others suggest that the entire process is far messier than Chandler suggested. companies would hatch perfect strategies and then create neat structures and organizational maps. Chandler was. Chandler’s theories also contributed to the ‘professionalization of management’. says Tom Peters with typical forthrightness. the development of the steel. several generations on. Hamel argues. These same forces. Chandler’s point was that new challenges give rise to new structures. the choices that it makes about the markets it attacks. chemical and engineering industries and a dramatic rise in the scale of production and the size of
. He argued that strategy came before structure. Having developed the best possible strategy. In a perfect world. ‘Of course. He traced the historical development of what he labeled ‘the managerial revolution’ fueled by the rise of oil-based energy. coupled with advances in communications and techniques of management control produced divisionalization and decentralization. ‘For it is the structure of the organization that determines. the multi-company coalition. The challenges of size and complexity. Few historians are prescient. are now driving us towards new structural solutions –the federated organization. companies could then determine the most appropriate organizational structure to achieve it. ‘I think he got it exactly wrong’. Contemporary strategist. More recently. and the virtual company. ‘Those who dispute Chandler’s thesis that structure follows strategy miss the point’. Gary Hamel provides a more positive perspective on Chandler’s insights.Alfred Chandler
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While the multi-divisional form has largely fallen out of favor –among thinkers at least – another of Chandler’s theories continues to raise the blood pressure of those who care about such things. this was speedily accepted as a fact of life – no-one had previously considered strategy in such terms. Reality however.’2 Further plaudits come from Business Week: ‘In the history of business. over time. In the early sixties. and the adoption of courses of action and the allocation of resources necessary for carrying out these goals’. is a mess in which strategy and structure mix madly. strategy and structure are inextricably intertwined. Chandler defined strategy as ‘the determination of the long-term goals and objectives of an enterprise. Chandler’s premise has been regularly questioned. BC stands for Before Chandler’.

Bibliography
Strategy and Structure. 1990. 1977. The logical progression from this is that organizations and their managements require a planned economy rather than a capitalist free-for-all dominated by the unpredictable whims of market forces. Boston. Scale and Scope: The Dynamics of Industrial Capitalism. MIT Press. Capstone. H. Liberation Management. Alfred P Knopf. In the more sedate times of the sixties. Managerial Hierarchies (with Deams.
Notes
1 2 Peters. The Ultimate Business Library. led to business owners having to recruit a new breed of professional manager. Stuart. Cambridge. Oxford. the lure of the visible hand proved highly persuasive. Increases in scale. New York. MA. Cambridge. MA. MA. Harvard University Press. MA. Crainer. 1997. Chandler observed.. Chandler believes that the roles of the salaried manager and technician are vital. 1962. 1992. and talks of the ‘visible hand’ of management coordinating the flow of product to customers more efficiently than Adam Smith’s ‘invisible hand’ of the market (see Chandler’s 1977 book.The Ultimate Business Guru Book
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companies. Harvard University Press. Harvard University Press. The Visible Hand: The Managerial Revolution in American Business. 1980. Tom. eds).
. Cambridge. The Visible Hand).

” W Edwards Deming American consultant and academic 1900–93
Breakthrough ideas
‘Manage for quality’ The Fourteen Points
Key book
Out of the Crisis
. customers that boast about your product and service. and that bring friends with them.W Edwards Deming
“Profit in business comes from repeat customers.

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W Edwards Deming (1900–93) has a unique place among management theorists. He had an impact on industrial history in a way others only dream. Testament to his impact can be seen if you walk into the headquarters building of Toyota in Tokyo. The lobby features three portraits. One is of the company’s founder. The second is of the company’s current chairman. The third is of W. Edwards Deming. Deming was born in Iowa and spent his childhood in Wyoming. He trained as an electrical engineer at the University of Wyoming and then received a PhD in mathematical physics from Yale in 1928. He worked as a civil servant in Washington at the Department of Agriculture. While working at the Department he invited the statistician, Walter Shewhart, to give a lecture. This proved an inspiration. In 1939 Deming became head statistician and mathematician for the US census. During World War II he championed the use of statistics to improve the quality of US production and, in 1945, joined the faculty of New York University as a Professor of Statistics. Deming visited Japan for the first time in 1947 on the invitation of General MacArthur. He was to play a key role in the rebuilding of Japanese industry. In 1950 he gave a series of lectures to Japanese industrialists on ‘quality control’. ‘I told them that Japanese industry could develop in a short time. I told them they could invade the markets of the world – and have manufacturers screaming for protection in five years. I was, in 1950, the only man in Japan who believed that,’ Deming later recalled. In fact, Deming was probably the only man in the world to believe that Japanese industry could be revived. But, helped by him, revive it did in a quite miraculous way. During the fifties, Deming and the other American standard bearer of quality Joseph Juran, conducted seminars and courses throughout japan. Between 1950 and 1970 the Japanese Union of Scientists and Engineers taught statistical methods to 14,700 engineers and hundreds of others. The message – and the practice – spread. The Japanese were highly receptive to Deming’s message. His timing was right – the country was desperate and willing to try anything. But, much more importantly, Deming’s message of teamwork and shared responsibility struck a chord with Japanese culture. Deming’s emphasis on group rather than individual achievement

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enabled the Japanese to share ideas and responsibility, and promoted collective ownership in a way that the West found difficult to contemplate let alone understand. Within Japan, Deming’s impact was quickly recognized. He was awarded the Second Order of the Sacred Treasure and the Union of Japanese Scientists and Engineers instigated the annual Deming Prize in 1951. Deming’s message was that organizations needed to ‘manage for quality’. To do so required focus on the customer – in 1950, for example, Deming was anticipating the 1990s fad for reengineering with his call to arms: ‘Don’t just make it and try to sell it. But redesign it and then again bring the process under control . . . with everincreasing quality . . . The consumer is the most important part of the production line.’ At the time such pronouncements would have been greeted with disdain or bemusement in the West where production lines ran at full speed and little thought was given to who would buy the products. Instead of the quick fix, Deming called for dedication and hard work. His message was never tainted by hype or frivolity ‘Quality is not something you install like a new carpet or a set of bookshelves. You implant it. Quality is something you work at. It is a learning process,’ said Deming. The West stuck with their new carpets; the Japanese learned. Also difficult for the West to swallow was Deming’s argument that responsibility for quality must be taken by senior managers as well as those on the factory floor. Only with senior management commitment could belief in and implementation of quality cascade down through the organization. Quality, in Deming’s eyes, was not the preserve of the few but the responsibility of all. He repeatedly said that management was 90 percent of the problem. Given that the West was hell-bent on ‘professionalizing’ management, this was hardly a message likely to go down well. These exhortations were backed by the use of statistical methods of quality control. These enabled business plans to be expanded to include clear quality goals. While the Japanese transformed their economy and world perceptions of the quality of their products, Western managers flitted from one fad to the next. Deming

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was completely ignored. Eventually, discovery came in 1980 when NBC featured a TV program on the emergence of japan as an industrial power (‘If Japan can, why can’t we?’). Suddenly, Western managers were seeking out every morsel of information they could find. By 1984 there were over 3000 quality circles in American companies and many thousands of others appearing throughout the Western world. It seemed that the sudden rush of fame and glory had come too late. After all, Deming was in his eighties by the time he was feted in the West. Undaunted, he dedicated the rest of his life to preaching his quality gospel wherever people wanted to hear it – and sometimes where they didn’t. Deming’s message was distilled down to his famed Fourteen Points: 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. Create constancy of purpose for improvement of product and service. Adopt the new philosophy. Cease dependence on inspection to achieve quality. End the practice of awarding business on the basis of price tag alone. Instead, minimize total cost by working with a single supplier. Improve constantly and forever every process for planning, production and service. Institute training on the job. Adopt and institute leadership. Drive out fear. Break down barriers between staff areas. Eliminate slogans, exhortations and targets for the workforce. Eliminate numerical quotas for the workforce and numerical goals for management. Remove barriers that rob people of pride of workmanship. Eliminate the annual rating or merit system. Institute a vigorous program of education and self–improvement for everyone. Put everybody in the company to work to accomplish the transformation.

Deming’s Fourteen Points have become the commandments of the quality movement. In his efforts to move quality out of the factory floor and onto the

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desk of every single executive, Deming re-created it as a philosophy of business and, for some, of life. ‘Unfortunately, a system of totality insists, by definition, that it will solve everything’, noted Christopher Reed in an obituary of Deming.1 Deming disciples – and there are many – would counter by pointing towards the achievements of Toyota. Move beyond the portraits in the lobby and you enter the company which best personifies Deming’s theories. Toyota was the first to champion ‘lean production’ in the 1950s – the West discovered the idea nearly 40 years later. Explaining its genesis, The Economist noted: ‘Lean production grew from Toyota’s crusade against waste: the waste of time caused by having to repair faulty products and the waste of resources caused by keeping unnecessarily large stocks. It has three principles. One, to produce things only when they are needed – just in time rather than just in case. Two, to turn every body into a quality checker, responsible for correcting errors as they happen. Three, to think of a company in terms of a value stream that extends all the way from suppliers to customers, rather than as isolated products and processes.’2 Toyota is the living exemplar of Deming’s theories. As working examples go, it remains impressive. Gary Hamel has pointed out that its Western competitors have simply followed what Toyota has done for the last 40 years. If Western car manufacturers had listened to W Edwards Deming, the roles might have been reversed. If Western industry as a whole had listened, who knows what might have happened.

Notes
1 2 Reed, Christopher, ‘A profit in his own country’, The Observer, 9 January 1994. ‘Lean and its limits’, The Economist, 14 September 1996.

Key books
The Practice of Management The Age of Discontinuity Management. Tasks, Responsibilities, Practices Adventures of a Bystander

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Peter Ferdinand Drucker (born 1909) is the major management and business thinker of the century. Of that there is little question. ‘In a field packed with egomaniacs and snake–oil merchants, he remains a genuinely original thinker’, observed the Economist.1 Prolific, even in his eighties, Drucker’s work is allencompassing. There is little that executives do, think or face that he has not written about. Take the political fashion of the 1980s for privatization. It was Drucker who first introduced the idea of privatization – though he labeled it ‘reprivatization’. This was energetically seized upon by politicians in the 1980s, though their interpretation of privatization went far beyond that envisaged by Drucker. Alternatively, take the contemporary fixation with knowledge management. ‘The knowledge worker sees himself just as another professional, no different from the lawyer, the teacher, the preacher, the doctor or the government servant of yesterday’, wrote Drucker in his 1969 classic The Age of Discontinuity. ‘He has the same education. He has more income, he has probably greater opportunities as well. He may well realize that he depends on the organization for access to income and opportunity, and that without the investment the organization has made – and a high investment at that – there would be no job for him, but he also realizes, and rightly so, that the organization equally depends on him.’2 Drucker was exploring the implications of knowledge being both power and ownership 30 years ago. If knowledge, rather than labor, was to be the new measure of economic society then Drucker argued that the fabric of capitalist society must change: ‘The knowledge worker is both the true capitalist in the knowledge society and dependent on his job. Collectively the knowledge workers, the employed educated middle–class of today’s society, own the means of production through pension funds, investment trusts, and so on.’ In Managing on the Edge (1990), Richard Pascale noted: ‘Peter Drucker’s book The Age of Discontinuity describes the commercial era in which we live’. Drucker has proved remarkably prescient time and time again. Far sighted and always opinionated, Peter Drucker was born in Austria where his father, Adolph, was the chief economist in the Austrian civil service. (Freud had lectured in psychiatry to his mother.) His early experiences in the Austria of the

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1920s and 1930s proved highly influential. ‘His background . . . has done more than shape Mr Drucker’s style. It has left him with a burning sense of the importance of management. He believes that poor management helped to plunge the Europe of his youth into disaster, and he fears that the scope for poor management is growing larger, as organizations become ever more complicated and interdependent,’ noted the Economist.3 Drucker worked as a journalist in London, before moving to America in 1937. His first book, Concept of the Corporation (1946) was a groundbreaking examination of the intricate internal working of General Motors and revealed the auto-giant to be a labyrinthine social system rather than an economical machine. (In the UK the book was retitled Big Business as, Drucker explains, ‘both Concept and Corporation [were] then considered vulgar Americanisms’.) His books have emerged regularly ever since – and now total 29. Along the way he has coined phrases and championed concepts such as Management By Objectives. Many of his innovations have become accepted facts of managerial life. He has celebrated huge organizations and anticipated their demise. (This has led to suggestions of inconsistency – though this is a rather hollow criticism of a career spanning over 60 years.) His 1964 book Managing for Results was, Drucker says, the ‘first book ever on what we now call strategy’; The Effective Executive (1966) was ‘the first and still the only book on the behavior being a manger or executive requires’. (As Drucker’s comments suggests he is well aware of his influence –’Mr Drucker is not shy about reminding people of his contribution to management studies and some find him a touch dogmatic,’ wrote The Economist with its customary delicacy.4) The coping stones of Drucker’s work are two equally huge and brilliant books: The Practice of Management (1954) and Management: Tasks, Responsibilities, Practices (1973). Both are encyclopedic in their scope and fulsome in their historical perspectives. More than any other volumes they encapsulate the essence of management thinking and practice. The genius of Drucker is that he has combined quantity and quality while ploughing a thoroughly idiosyncratic furrow. He has resolutely pursued his own interests, and the dictates of his considerable intellect, rather than the dictates of the dollar. In an age of thinkers as media personalities, Drucker refuses to be distracted.

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Disturbers of his Californian retreat receive a preprinted message assuring them that he ‘greatly appreciates your kind interest, but is unable to: contribute articles or forewords; comment on manuscripts or books; take part in panels and symposia; join committees or boards of any kind; answer questionnaires; give interviews; and appear on radio or television’. Drucker has not shunned the world. He is not J.D. Salinger. But he is focused – as he has observed: ‘The single minded ones, the monomaniacs, are the only true achievers. The rest, the ones like me, have more fun; but they fritter themselves away. The monomaniacs carry out a mission; the rest of us have interests. Whenever anything is being accomplished, it is being done . . . by a monomaniac with a mission.’ Drucker’s book production has been supplemented by a somewhat low key career as an academic and some time consultant. He was Professor of Philosophy and Politics at Bennington College from 1942 until 1949 and then became a Professor of Management at New York University in 1950 – ‘The first person anywhere in the world to have such a title and to teach such a subject’, he proudly recalls. Since 1971, Drucker has been a Professor at Claremont Graduate School in California. He also lectures in oriental art, has an abiding passion for Jane Austen and has written two novels (less successful than his management books). As if to prove that he is multidimensional, in Who’s Who Drucker lists mountaineering as one of his recreations. Drucker considers himself as much a journalist as an academic or consultant. (One career option he has ruled out: ‘I would be a very poor manager. Hopeless. And a company job would bore me to death.’) His autobiography is entitled, Adventures of a Bystander, emphasizing his role as a journalistic recorder of trends steering clear of direct involvement. ‘I have always been politically incorrect. I have never belonged to the outer circle, let alone the inner circle. No, I am an outsider and I am a loner. I have always done my own work,’ he said in 1996, getting in a barbed comment on the propensity of academics to get others to do their research and writing. Drucker’s formidable ire is particularly reserved for business schools. ‘The business schools in the US, set up less than a century ago, have been preparing well-

to run armies.’ he wrote. a market. It was used to build the Great Wall of China.6 Drucker’s first attempt at creating the managerial bible was The Practice of Management (‘a fairly short book of fundamentals’ according to him). rather than forces or facts. human discipline. to cross the oceans for the first time. Most organizations are being run very much the way they were when I first started to study them. but a means to an end of business performance and business results. But it was a theoretical want before. ‘Management is tasks. We have a lot of new tools. In one of the most quoted and memorable paragraphs in management literature. The book is a masterly exposition on the first principles of management. have dominated the customer’s life and filled all his waking moments. though management is the universal science. There may not be many new ideas. ‘Every achievement of management is the achievement of a manager. dedication and integrity of managers determine whether there is management or mismanagement. Every failure is the failure of a manager. or improving in our execution of it.5 Drucker’s greatest achievement lies in identifying management as a timeless. But management is also people. Organization structure is an
. he has written. But. People manage. ‘Actually very little has changed so far. nature or economic forces. but not very many new ideas.’ Drucker also provided an evocatively simple insight into the nature and raison d’être of organizations: ‘Organization is not an end in itself. but it still pays to understand the fundamentals. The want they satisfy may have been felt by the customer before he was offered the means of satisfying it. only when the action of businessmen makes it an effective demand is there a customer. Markets are not created by God. It may indeed. Drucker has repeatedly dismissed Harvard and notes that ‘Only now in my very old age has academia been willing to accept me’.Peter Drucker
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trained clerks’. but by businessmen. He largely succeeded. Management is discipline.’ Drucker puts the historical importance of management at our fingertips. this does not necessarily mean we are very good at it. Drucker gets to the heart of the meaning of business life. to erect the Pyramids.’ lamented Drucker in 1995. ‘There is only one valid definition of business purpose: to create a customer. The vision. like the want of food in a famine.

Ford and others. Tasks.’ With its examinations of GM. It is vision and moral responsibility that. no condoning of poor or mediocre performance. fifteen years hence. The first question in discussing organization structure must be: What is our business and what should it be? Organization structure must be designed so as to make possible the attainment of the objectives of the business for five. . ‘The one contribution he is uniquely expected to make is to give others vision and ability to perform. There must be high performance requirements. ‘The function which distinguishes the manager above all others is his educational one’.’ At the time. management must demonstrate that it realizes that integrity is the one absolute requirement of a manager. to motivate and communicate. ten. and there should be some way for a manager to appeal to a higher court. and rewards must be based on performance. ‘A manager’s job should be based on a task to be performed in order to attain the company’s
. Drucker’s audience and world view in The Practice of Management is resolutely that of the large corporation. define the manager’ This morality is reflected in the five areas identified by Drucker ‘in which practices are required to ensure the right spirit throughout management organization: ‘1. to measure. ‘4. . There must be a rational and just promotion system. in the last analysis. and the wrong structure will seriously impair business performance and may even destroy it . the one quality that he has to being with him and cannot be expected to acquire later on. the idea from The Practice of Management which was seized upon was what became known as Management By Objectives (MBO). he wrote. ‘2.The Ultimate Business Guru Book
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indispensable means. Responsibilities and Practices in 1973. and to develop people. In The Practice of Management and the equally enormous Management. to organize. In its appointments. ‘3. Each management job must be a rewarding job in itself rather than just a step on the promotion ladder. The world has moved on (and so has Drucker). ‘5. Drucker established five basics of the managerial role: to set objectives. Management needs a ‘charter’ spelling out clearly who has the power to make ‘life-and-death’ decisions affecting a manager.

Take more risks and for a longer period ahead. Given that these were laid down over 40 years ago. Traditionally a manager has been expected to know one or more functions. The world is becoming not labor intensive. their prescience is astounding. MBO became a simplistic means of setting a corporate goal and heading towards it and bore little relation to Drucker’s broader interpretation. Traditionally a manager has been expected to know a few products or one industry. . ‘4. Be able to make strategic decisions. Managing for the Future. Drucker has also developed his thinking on the role of knowledge – most notably in his 1992 book. will no longer be enough. ‘6. In particular. ‘7. Drucker wrote that tomorrow’s managers must: ‘1. The call to take responsibility is a consistent thread throughout 60 years of productive work. Drucker wrote. Be able to built an integrated team.’ Recent years have seen Drucker maintain his remarkable work rate. This. .Peter Drucker
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objectives . you must replace power with responsibility’. (The entire MBO concept was developed most fruitfully by a number of others including George Odiorne and the UK’s John Humble. ‘3. his energies have been focused on non-profit organizations. ‘2. too. in which he observes: ‘From now on the key is knowledge. not materials
. This will no longer be enough. the manager should be directed and controlled by the objectives of performance rather than by his boss’. His ability to return to first principles and question the fundamentals remains undimmed. each member of which is capable of managing and of measuring his own performance and results in relation to the common objectives. Manage by objectives. The manager of the future must be able to see the business as a whole and to integrate his function with it. Hijacked as yet another bright idea. Be able to communicate information fast and clearly. In Managing in a Time of Great Change (1995) he objected to the term manager – ‘Manager has implications of subordinates’ (he prefers to talk of executives) – and suggested ‘To build achieving organizations. ‘5.) Drucker identified ‘seven new tasks’ for the manager of the future.

‘The first constant in the job of management is to make human strength effective and human weakness irrelevant.7 Drucker castigates managers for becoming obsessed with promotions and suggests that new forms of work need to be explored. ‘Interview with Peter Drucker’. predicting that by then the US ‘will be totally bankrupt’ if current trends continue. He peppers conversation with anecdotes. Forget the theorizing. Donkin. The Economist. 25 December 1993–7 January 1994. 14 December 1995. ‘The shape of things to come’. 1969. Peter. Leader to Leader. not energy intensive.
. The Age of Discontinuity. ‘Peter Drucker. Financial Times.’ Approaching the millennium. Drucker. Drucker remains worth listening to. He remains a trenchant realist. Drucker. He is aghast at people who choose early retirement – regarding it as Ca severe indictment of our organizations’ – but maintains that by the time they reach 60 people should withdraw from decision-making positions. And.’ he says. Premier issue. salvationist’. ‘Good guru guide’. For example.The Ultimate Business Guru Book
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intensive. a stream of pertinent statistics and controversial opinions. Peter.
Notes
1 2 3 4 5 6 7 ‘Good guru guide’. 25 December–7 January 1994. The Economist. In reality Drucker believes people will need to work longer. Heinemann. Business Week On-line conference. ‘Managing in a time of great change’. Richard. the bottom-line is never far away: ‘Managers are accountable for results. but knowledge intensive. London. though never easy. 14 June 1996. Drucker can make corporate life appear understandable. period’. The Economist. 1 October 1994. Drucker dismisses talk of balancing the US budget by 2003 as ‘sheer nonsense’.

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to co-ordinate and to control. to organize.Henri Fayol
“To manage is to forecast and plan. to command.” Henri Fayol French engineer and manager 1841–1925
Breakthrough ideas
The functional principle Principles of management
Key book
General and Industrial Management
.

When he gave a developed version of his ideas at a 1908 conference. In 1900 he delivered a speech at a mining conference. Even among Taylor’s managers. During that time Fayol produced the ‘functional principle’. Fayol also developed an increasingly successful parallel career as a theorist. were that management was critical and universal. large or small. The second contribution of Fayol was to ponder the question of how best a company could be organized.) Fayol was important for two reasons. 15. France and at the National School of Mines in St Etienne. Fayol set up a Center of Administrative Studies and examined the performance of a government department. ‘L’Incapacité Administrative de l’Etat – les Postes et Télégraphes’. Fayol was educated in Lyon. however.The Ultimate Business Guru Book
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Europe has produced precious few original management thinkers. It is surprising therefore that the achievements and insights of the Frenchman Henri Fayol (1841– 1925) are granted so little recognition. (Again. Fayol spent his entire working career with the company and was its managing director between 1888 and 1918.)
. His studies led to lectures at the Ecole Supérieure de la Guerre. imagination and humanity were in short supply – or so he hoped and planned. of all undertakings.000 copies had been printed and a book was published. that anyone else made such a bold pronouncement in management’s favor. commercial. religious or any other’. the first rational approach to the organization of enterprise. It was not until 1954. In 1860 he graduated as a mining engineer and joined the French mining company. (This led to his uncomplimentary report. he wrote. His conclusions. but still treated managers as stopwatch holding supervisors. industrial. initiative. By 1925. 2000 copies were immediately reprinted to satisfy demand. First. Fayol emerged from a similar background in heavy industry. ‘Management plays a very important part in the government of undertakings. political. Frederick Taylor’s Scientific Management emasculated the working man. he placed management at center stage. and Drucker’s The Practice of Management. Commentry-Fourchamboult-Décazeville. this was something Taylor had ignored. While retired.

Fayol took a far broader perspective than anyone else had previously done. Fayol’s observations and conclusions were important. No Fayol doctrine emerged in the same way as Taylorism. security activities. While others concentrated on the workman and the mechanics of performance. The six functions which he identified were: technical activities. Fayol also provided a pithy definition of the role of management: ‘To manage is to forecast and plan. Yet their direct impact was marginal. financial activities. He talked of ‘ten yearly forecasts . It may be fashionable to talk of an end to functional mindsets and of free-flowing organizations. revised every five years’ – one of the first instances of business planning in practice – and wrote: ‘The maxim. . His conclusions were accurate descriptions of the roles undertaken by managers and the structure of organizations for decades beyond Fayol’s life. to organize. “managing means looking ahead”. functional structure becomes costly in terms of time and effort’. to command. he focused on the role of management and the essential skills required of managers. Such functional separations have dominated the way companies have been managed throughout the twentieth century. accounting activities. the lack of an English translation of his work didn’t help. but Fayol’s functional model largely remains. and managerial activities.1 While this is undoubtedly true. . and it is true that if foresight is not the whole of management at least it is an essential part of it’. Implicit in this was that managers can and should be trained in the basic disciplines demanded by their profession. In many respects Henri Fayol was the first management thinker.Henri Fayol
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In doing so. commercial activities. noted Fayol.)
. Fayol concluded: ‘All activities to which industrial undertakings give rise can be divided into the following six groups’. Fayol’s methods were later exposed by Drucker who observed: ‘If used beyond the limits of Fayol’s model. ‘The management function is quite distinct from the other five essential functions’. (In a thoroughly AngloSaxon industry. gives some idea of the importance attached to planning in the business world. to co-ordinate and to control’.

Follett’s first businessoriented book. ethical and economical aspects. indeed. Isobel Briggs in 1926. Mary Parker Follett attended Thayer Academy and the Society for the Collegiate Instruction of Women in Cambridge. and as many others as you like. use it to work for us’. Massachusetts. Follett was a female. Mary Parker Follett (1868–1933).’ In particular. Generally ignored.The Ultimate Business Guru Book
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The canon of management literature and the list of management thinkers is dominated by men. with psychological. I think. she
. to any other activity.’ Born in Quincy. compromise or integration. Follett was decades ahead of her time.’ said Follett. The latter. ‘I do not think that we have psychological and ethical and economic problems. She argued that as conflict is a fact of life ‘we should. she moved to London. liberal humanist in an era dominated by reactionary males intent on mechanizing the world of business. We have human problems. ‘I think we should undepartmentalize our thinking in regard to every problem that comes to us. Follett pointed out three ways of dealing with confrontation: domination. She also studied at Newnham College.1 ‘The study of human relations in business and the study of the technology of operating are bound up together. ‘We should remember that we can never wholly separate the human from the mechanical sides. Massachusetts (now part of Harvard University). Her first published work was The Speaker of the House of Representatives (1896). The exceptions to this are substantial thinkers. None more so than the American political scientist. She was discussing issues such as teamworking and responsibility (now reborn as empowerment) in the first decades of the twentieth century. Follett’s career was largely spent in social work though her books appeared regularly – The New State (1918). The breadth and humanity of her work was a refreshing counter to the dehumanized visions of Taylor and others. which she wrote while still a student. an influential description of Follett’s brand of dynamic democracy. and Creative Experience (1924). In her later years she was in great demand as a lecturer. Follett explored conflict. After the death of her long-time partner.’ warned Follett in Dynamic Administration. The simple thrust of Follett’s thinking was that people were central to any business activity – or. Cambridge in the UK and in Paris.

a Western thinker was honored in Japan. offered a vision of the future and trained followers to become leaders. ‘Responsibility is the great developer of men’. their ability to reconcile conflicting interests. defining the purpose of the business and anticipation – ‘We look to the leader to open up new paths.’ Follett wrote. new opportunities’. she wrote. their ability to make a working unit out of many diverse elements. however. and notice how often they have gained their positions by their ability to bring into harmonious relation men of antagonistic temperaments.Mary Parker Follett
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concluded. is the only positive way forward. Peter Drucker. a compendium of Follett’s writings with commentaries from a host of contemporary figures including Kanter.’ Follett’s work was largely neglected in the West. Her work has now been brought to a wider audience through the British academic Pauline Graham – in 1994. which even boasts a Follett Society. no-one even mentioned Follett’s name. This can be achieved by first ‘uncovering’ the real conflict and then taking ‘the demands of both sides and breaking them up into their constituent parts’. We should never allow ourselves to be bullied by an “either-or”. organized the experiences of the group.2
. Indeed. ‘Our outlook is narrowed. Follett advocated giving greater responsibility to people – at a time when the mechanical might of mass production was at its height. Follett suggested that a leader was someone who saw the whole rather than the particular. How many modern CEOs would mouth the same sentiments but still be unable to put them into practice? There was also a modern ring to Follett’s advice on leadership: ‘The most successful leader of all is one who sees another picture not yet actualized’. There is often the possibility of something better than either of two given alternatives. Once again. Follett was an early advocate of management training and that leadership could be taught. Follett saw the leader’s tasks as co-ordination. our chances of business success largely diminished when our thinking is constrained within the limits of what has been called an either-or situation. but study the political leaders. the party bosses. Prophet of Management. our activity is restricted. recalls that when he was seeking out management literature in the 1940s. now an admirer. Drucker and Mintzberg. ‘The theory has been of personal domination. Graham edited Mary Parker Follett.

” Henry Ford American car maker 1863–1947
Breakthrough ideas
Mass production
Key book
My Life and Work
.Henry Ford
I have no use for a motor car which has more spark plugs than a cow has teats.

and everyone will have one. Edsel. At one point the company had cash reserves of $1 billion. he was selling 600 a month.898. he built his first car in 1896. By then the Ford company was making a car a minute. Michigan was the biggest in the world – over 14. . At that time.) In 1907. And this. personality and achievements of the car maker. everybody will be able to afford one. with staggering success. there was a great deal more to the career. Ford was originally a boy racer. Quickly he became convinced of the commercial potential and started his own company in 1903. was the Model A. (This did not stop Ford from maintaining: ‘A business that makes nothing but money is a poor kind of business’.) Ford’s first car. (In fact. While this is true. After spending time as a machinist’s apprentice. Ford’s commitment to lowering prices cannot be doubted. At the time.) Ford believed in mass production because it meant he could make cars which people could afford. He was no clone of Frederick Taylor. Between
. Ford professed his aim was to ‘build a motor car for the great multitude . He was quick to establish international operations – Ford’s first overseas sales branch was opened in France in 1908 and. is what he achieved. Through innovative use of new mass production techniques. Ford’s market share was in excess of 57 percent.The Ultimate Business Guru Book
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The standard view of Henry Ford (1863–1947) is that he was the first exponent of mass production. a watch repairer and a mechanic. In 1923 annual sales peaked at 2.000 people worked on the 57-acre site. And it was to the world Ford looked. . (There was nothing unusual in this – between 1900 and 1908 over 500 American companies were set up to make cars. . taking over. Ford began making cars in the UK. In 1919 Ford resigned as the company’s President with his son. . After a year. Ford’s Model T was born. in 1911.120. It will be so low in price that no man making a good salary will be unable to own one – and enjoy with his family the blessing of hours of pleasure in God’s great open spaces . Ford’s factory at Highland Park. the unique Ford was no clone of anyone. The horse will have disappeared from our highways. Henry Ford developed mass production not because he blindly believed in the most advanced production methods. between 1908 and 1927 Ford produced 15 million Model Ts. In 1908. the automobile will be taken for granted’.

General Motors chief. Ford’s masterly piece of marketing lay in his intuitive realization that the mass car market existed – it just remained for him to provide the products the market wanted. He was reputed to have kicked a slightly modified Model T to pieces such was his commitment to the unadulterated version. straightforward and affordable. Ford followed this strategy through with characteristic thoroughness. Model Ts were black. Having given the market what it wanted. The company’s reliance on the Model T nearly drove it to self-destruction.’ Ford stuck rigidly to his policy. he presumed that more of the same was also what it required. there is concentration on the product as this lends itself to measurement and analysis. His basic conception of one car in one utility model at an ever lower price was what the market.’ Levitt wrote. needed at the time. When other manufacturers added extras. and lowpriced car were revolutionary and stand among the greatest contributions to our industrial culture. Ford kept it simple and dramatically lost ground. The reasons why were explained by Ted Levitt in his article ‘Marketing myopia’ which re-evaluated Ford from a marketing perspective. Though the two were inextricably linked. high minimum wage. noted: ‘Mr Ford’s assembly line automobile production. especially the farm market.Henry Ford
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1908 and 1916 he reduced prices by 58 percent – at a time when demand was such that he could easily have raised prices. Finally. The profit possibilities look spectacular. ‘Mass production industries are impelled by a great drive to produce all they can. Reasonably priced cars demanded mass production methods and costs could only be lowered through increased efficiency and standardization so that more cars could be produced. The paradox of Ford was that by thinking of the consumer first and production second his was a triumph of marketing as much as of production methods.
. Alfred Sloan. The corollary of this was to prove Ford’s nemesis. All effort focuses on production. The prospect of steeply declining unit costs as output rises is more than most companies can usually resist. The result is that marketing gets neglected. he is usually associated with the latter rather than the former.

Ford was an atheist with attitude. in the Ford company’s huge plant. he didn’t believe in management. The methods used by Ford were grim and unforgiving. Among his many innovations was a single human one: Ford introduced the $5 wage for his workers which. ‘How come when I want a pair of hands I get a human being as well. Ford believed in people getting on with their jobs and not raising their heads above functional parapets. New York. ‘Fundamental to Henry Ford’s misrule was a systematic. Ford will never be celebrated for his humanity or people management skills. Harper & Row. Peter E.
. The Practice of Management. deliberate and conscious attempt to run the billion-dollar business without managers. was around twice the average for the industry. In the same way as Ford didn’t believe in Models Ts in different colors with fins and extras. He didn’t want engineers talking to salespeople. The secret police that spied on all Ford executives served to inform Henry Ford of any attempt on the part of one of his executives to make a decision.The Ultimate Business Guru Book
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In terms of management. was based round strict functional divides – demarcations. Skeptics suggest that the only reason he did this was so that his workers could buy Model Ts of their own. or people making decisions without his say so. New York. 1923. 1954. Page & Co.’ noted Peter Drucker in The Practice of Management. Doubleday.’ he complained. production.1 As a result. at the time.
Bibliography
My Life and Work.
Notes
1 Drucker.

” Harold Geneen American executive 1910–97
Breakthrough ideas
Management by facts and analysis
Key books
Managing The Synergy Myth
. month after month.Harold Geneen
“The very fact that you go over the progression of those numbers week after week. means that you have strengthened your memory and your familiarity with them so that you retain in your mind a vivid composite picture of what is going on in your company.

one willing to be responsible for people – their lives and their hopes. ‘Trust is not earned by being a nice guy. ITT’s spending spree amounted to 350 companies and included Avis Rent-A-Car. Geneen combined hard work and an apparently slavish devotion to figures – ‘Putting deals together beats spending every day playing golf’. ITT bought companies as addictively as Imelda Marcos once bought shoes.1 Geneen allowed for no frivolity and. Bell & Howell. Keeping the growing array of companies in check was a complex series of financial checks and targets. Geneen managed them with intense vigor. His basic organizational strategy was that diversification was a source of strength. I say you must be a person of character.’ wrote Geneen in one of his final articles. the ‘legendary conglomerateur’ according to Business Week. which had started life in 1920 as a Caribbean telephone company. There was nothing half-hearted in Geneen’s pursuit of diversity. As part of his formula. By 1970 ITT was composed of 400 separate companies operating in 70 countries. Sheraton Hotels. The ragbag collection of names was a managerial nightmare. Jones & Laughlin and finally Raytheon. a remorselessly driven workaholic who believed that analytical rigor could – and surely would – conquer all. worked a ten-hour day at his office in New York’s Waldorf-Astoria Hotel running Gunther International. Few other executives could have done so.The Ultimate Business Guru Book
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Aformidable mythology has built up around the career and management style of Harold Geneen (1910–1997). It comes with character and competence. but he brought a unique single-mindedness to the task. Harold Geneen qualified as an accountant after studying at night schools. This company was taken over by ITT. Continental Baking and Levitt & Sons among many others. Under Geneen. Born in Bournemouth on England’s genteel south coast. a company he bought into in 1992. every month over 50 executives flew to Brussels to spend four days poring
. he once said. even in his late eighties. He then began climbing the executive career ladder working at American Can. Geneen joined the board of ITT in 1959 and set about turning the company into the world’s greatest conglomerate. Geneen became the archetypal bullish American executive. Behind the mythology.

Geneen stepped down as chief executive in 1977 and as chairman in 1979. to be sure that what you do have is indeed what we will call an unshakeable fact’. While others would have watched as the deck of cards fell to the ground. Geneen kept adding more cards. He hoped to make people ‘as predictable and controllable as the capital resources they must manage’. said Geneen. emphasizing consolidation rather than growth . .’ announced Geneen. Buenos Aires. moreover. The function of the planning and the meetings is to force the logic out into the open where its value and need are seen by all. To Geneen. the company veered on to a new course. the fall in ITT’s fortunes simply served to validate his methods and philosophy. 177 rapidly disintegrated following Geneen’s departure. Facts were the lifeblood of the expanding ITT – and executives sweated blood in their pursuit. decisions are made based on logic – the business logic that results in making decisions which are almost inevitable because all the facts on which the decisions must be based are available.’ By sheer force of personality. Earnings went from $29 million to $562 million and earnings per share rose from $1 to $4. ‘After I left.20. Indeed.) Between 1959 and 1977. ‘The highest art of professional management requires the literal ability to smell a real fact from all others – and. you could say that ITT was a success in the parameters created by Geneen. guts and/ or plain impoliteness. The underside of ITT was exposed – it had worked with the CIA in Chile and been involved in offering bribes. His followers were unable to sustain his uniquely driven working style.Harold Geneen
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over the figures. . the writing was on the wall before that – the company’s profits fell in 1974 and 1975. ‘I want no surprises. Hong Kong. ‘Running a conglomerate requires working harder than most people want to work and taking more risks that most people want to take’. Brussels. Geneen’s approach worked. while managing to know the pressures and stresses each was under. I have felt the stab of frustration
. intellectual curiosity. (More cynically. The deck of cards tumbled. Often.• to have the temerity. said Geneen. IIT’s sales went from $765 million to nearly $28 billion. if necessary. In these meetings in New York. His managerial approach was candidly explained by ITT in its 1971 annual report: ‘More than 200 days a year are devoted to management meetings at various organizational levels throughout the world.

There is tight control of strategic decisions. The Individualized Corporation. The first multinational form identified by Bartlett and Ghoshal is the multinational or multidomestic firm. Ghoshal first came to prominence with the book Managing Across Borders (1989) which was one of the boldest and most accurate pronouncements of the arrival of a new era of global competition and truly global organizations. revitalizing. each with a distinctive source of competitive advantage.’ Bartlett and Ghoshal. marked a further step forward in the thinking of Ghoshal and Bartlett. He insists that his questions have remained the same. resources and information by the global hub. while overseas operations are considered as delivery pipelines to tap into global market opportunities. unlike others. Ghoshal has mapped and recorded the death of a variety of corporate truisms. Global scale facilities.
. typified by US corporations such as Ford earlier this century and Japanese enterprises such as Matsushita. The second is the global firm. What does strategy mean is where I started. Crucial to this is the recognition that multinational corporations from different regions of the world have their own management heritages. often centralized in the home country. The international firm is the third type. Sumantra Ghoshal (born 1948) is an intimidating figure. Ghoshal joined London Business School in 1994 and was formerly Professor of Business Policy at INSEAD and a visiting professor at MIT’s Sloan School. Its competitive strength is its ability to transfer knowledge and expertise to overseas environments that are less advanced. Its strength lies in a high degree of local responsiveness. Working along with Harvard Business School’s Christopher Bartlett. suggest that new. organizational forms can – and are – emerging. piercing eyes. Its strengths are scale efficiencies and cost advantages. but the answers have changed – ‘I am a plain vanilla strategy guy. hawkish intensity and intellectual brilliance. produce standardized products. The 1997 book. It is a decentralized federation of local firms (such as Unilever or Philips) linked together by a web of personal controls (expatriates from the home country firm who occupy key positions abroad).The Ultimate Business Guru Book
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With his film star cheekbones. he has become one of the most sought-after intellectuals in the business world.

The attitude of the parent company tends to be parochial. Bartlett and Ghoshal argue that global competition is forcing many of these firms to shift to a fourth model. controlled by sophisticated management systems and corporate staffs. they say. technologies and geographic markets which is central to the design of most divisionalized corporations. fostered by the superior know-how at the center. They point to the difficulties in managing growth through acquisitions and the dangerously high level of diversity in businesses which have acquired companies indiscriminately in the quest for growth. and faster. If you listen to managers of those companies you will detect great skepticism about achieving victory. This firm has to combine local responsiveness with global efficiency and the ability to transfer knowhow – better. The transnational firm is a network of specialized or differentiated units. ABB. actively works against the prime need: integration and the creation of ‘a coherent system for value delivery’.Sumantra Ghoshal
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It is a co-ordinated federation of local firms. cheaper. The subsidiary becomes a distinctive asset rather than simply an arm of the parent company. ‘Toshiba in Asia Pacific. Such independence. with attention paid to managing integrative linkages between local firms as well as with the center. The demise of the divisionalized corporation – as exemplified by Alfred Sloan’s General Motors – lies at the heart of Ghoshal and Bartlett’s work during the late eighties and early nineties. ‘Talk of transformation and you get the same examples. historical solutions are no longer applicable. The battle ahead is far more complex.1 Even the perspectives from ‘successful’ companies appear bleak. Ghoshal and Bartlett not surprisingly conclude that. as described by Ghoshal. is harsh: ‘You cannot manage third generation strategies through second generation organizations with first generation managers’. They have also declared as obsolete the assumption of independence among different businesses.’ he says.’
. Today’s reality. GE. Manufacturing and technology development are located wherever it makes sense. which they call the transnational. in the flux of global businesses. but there is an explicit focus on leveraging local know-how in order to exploit worldwide opportunities.

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Despite such a damning critique of corporate reality, Ghoshal is not totally discouraged. ‘Look at today and compare it to years ago. The quality of the strategic debate and discussion has improved by an order of magnitude,’ he says. ‘Third generation strategies are sophisticated and multi-dimensional. The real problem lies in managers themselves. Managers are driven by an earlier model. The real challenge is how to develop and maintain managers to operate in the new type of organization.’ The shift in emphasis in Ghoshal’s work is from the cool detachment of strategy to the heated complexities of people. While Managing Across Borders was concerned with bridging the gap between strategies and organizations, Ghoshal and Bartlett’s sequel, The Individualized Corporation, moved from the elegance of strategy to the messiness of humanity. One of the phenomena Ghoshal has examined is the illusion of success which surrounds some organizations like a well-burnished halo. ‘Satisfactory underperformance is a far greater problem than a crisis’, he says pointing to the example of Westinghouse which is now one-seventh the size of GE in revenue terms. ‘Over 20 years, three generations of top management have presided over the massive decline of a top US corporation,’ says Ghoshal. ‘Yet, 80 per cent of the time the company was thought to be doing well. Westinghouse CEOs were very competent and committed. They’d risen through the ranks and did the right things. Yet they presided over massive decline.’ The explanation he gives for this delusion of grandeur is that few companies have an ability for self-renewal. ‘You cannot renew a company without revitalizing its people. Top management has always said this. After a decade of restructuring and downsizing, top management now believes it. Having come to believe it, what does it really mean?’ Ghoshal contends that revitalizing people is fundamentally about changing people. The trouble is that adults don’t change their basic attitudes unless they encounter personal tragedy. Things that happen at work rarely make such an impact. If organizations are to revitalize people, they must change the context of what they create around people. ‘The oppressive atmosphere in most large companies resembles downtown Calcutta in summer’, says Ghoshal. ‘We intellectualize a lot in management.

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But if you walk into a factory or a unit, within the first 15 minutes you get a smell of the place.’ Vague and elusive though ‘smell’ sounds, Ghoshal – no touchy-feely idealist – believes that it can be nurtured. ‘Smell can be created and maintained – look at 3M. Ultimately the job of the manager is to get ordinary people to create extraordinary results.’ To do so requires a paradoxical combination of what Ghoshal labels stretch and discipline. As an example of this in practice he cites Intel: ‘At Intel there is constructive confrontation. It is demanded that you explain your point of view. The flip side is that at the end of a meeting a decision is made and you have to commit to it. Stretch and discipline are the yin and yang of business.’ These factors do not render attention to strategy, structure and systems obsolete. Businesses can still be run by strict attention to this blessed corporate trinity. These are, in Ghoshal’s eyes, the legacy of the corporate engineer, Alfred Sloan, and the meat and drink of business school programs. They are necessary, but Ghoshal adds a warning: ‘Sloan created a new management doctrine. Sloan’s doctrine has been wonderful but the problem is that it inevitably ends up creating downtown Calcutta in summer.’ The way out of the smog is through purpose (‘the company is also a social institution’); process (‘the organization as a set of roles and relationships’); and people (‘helping individuals to become the best they can be’). Undoubtedly these factors are less hard and robust than the three Ss, but Ghoshal believes they are the way forward.

Notes
1 International Management Symposium, London Business School, 11 November 1997.

Gary Hamel
“A company surrenders today’s businesses when it gets smaller faster than it gets better. A company surrenders tomorrow’s businesses when it gets better without getting different.” Gary Hamel American academic and consultant Born 1954

In 1978 Gary Hamel (born 1954) left his job as a hospital administrator and went to the University of Michigan to study for a PhD in International Business. At Michigan, Hamel met his eventual mentor, C.K. Prahalad. ‘We shared a deep dissatisfaction with the mechanistic way strategy was carried out’, Hamel recalls.1 Twenty years on, Hamel has established himself at the vanguard of contemporary thinking on strategy. Hard hitting, opinionated and rigorously rational, Hamel summarizes the challenge of the 1990s, in a typically earthy phrase, as ‘separating the shit from the shinola, the hype from the reality and the timeless from the transient.’ Hamel talks in eminently quotable shorthand. Challenge follows challenge; question is added to question. ‘Go to any company and ask when was the last time someone in their twenties spent time with the board teaching them something they didn’t know. For many it is inconceivable, yet companies will pay millions of dollars for the opinions of McKinsey’s bright 29-year old. What about their own 29year olds?’ As well as being visiting professor of strategic and international management at London Business School, California-based Hamel is a consultant to major companies and chairman of Strategos, a worldwide strategic consulting company. His reputation has burgeoned as a result of a series of acclaimed articles in the Harvard Business Review – including ‘Strategic intent’; ‘Competing with core competencies’; and ‘The core competence of the corporation’ – as well as the popularity of the bestselling, Competing for the Future. (All of these were co-written with Prahalad.) Along the way, Hamel has created a new vocabulary for strategy which includes strategic intent, strategic architecture, industry foresight (rather than vision) and core competencies. (Hamel and Prahalad define core competencies as ‘the collective learning in the organization, especially how to co-ordinate diverse production skills and integrate multiple streams of technologies’ and call on organizations to see themselves as a portfolio of core competencies as opposed to business units. The former are geared to growing ‘opportunity share’ wherever that may be; the latter narrowly focused on market share and more of the same.) Instead of talking about

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strategy or planning, they advocate that companies should talk of strategizing and ask ‘What are the fundamental preconditions for developing complex, variegated, robust strategies?’ The need for new perspectives on strategy is forcefully put by Hamel. ‘I am a professor of strategy and often times I am ashamed to admit it because there is a dirty secret: we only know a great strategy when we see one. In business schools we teach them and pin them to the wall like specimens. Most of our smart students raise their hands and say wait a minute was that luck or foresight? They’re partly right. We don’t have a theory of strategy creation. There is no foundation beneath the multi-billion dollar strategy industry. Strategy is lucky foresight. It comes from a serendipitous cocktail,’ he says.2 The trouble is we have sought to explain strategy by a series of simplistic frameworks. ‘We have an enormous appetite for simplicity. We like to believe we can break strategy down to Five Forces or Seven Ss. But you can’t. Strategy is extraordinarily emotional and demanding. It is not a ritual or a once-a-year exercise, though that is what it has become. We have set the bar too low,’ says Hamel. As a result, managers are bogged down in the nitty-gritty of the present – spending less than three percent of their time looking to the future. The reinvention of strategy occurs against the backdrop of an environment in which success has never been more important and tenuous. If Bill Gates says that Microsoft is always two years away from failure, what hope can there be for the rest of us? Hamel admits that the circumstances under which strategy is created have changed. ‘In many companies you see institutional entropy. How do you teach individuals to be enemies of entropy? It is like being a map maker in an earthquake zone. We are talking about products entering a market which is emerging and changing. How do you create strategy in the absence of a map?’ First, he says, you need to challenge traditional assumptions. The entire thrust of Hamel’s argument is that complacency and cynicism are endemic. ‘Dilbert is the bestselling business book of all time. It is cynical about management. Never has there been so much cynicism.’ It is only by challenging convention that change will happen. ‘Taking risks, breaking the rules, and being a maverick have always been important, but today they are more crucial than ever. We live in a discontinuous

industrial revolutionaries. When Hamel talks of change. a huge proportion. 80 percent of the learning will take place outside company boundaries. perhaps 95 percent. he is not considering tinkering at the edges. There is no proprietary data about the future. Second. In many companies Hamel observes ‘a lack of genetic diversity. The goal is to imagine what you can make happen. This group typically have around 15 percent market share – such as Kodak in the copier business or Avis – ‘Avis’ slogan We try harder enshrined the peasantry in its mission statement. says Hamel. ‘Harder doesn’t get you anywhere’. not experience. Among the people who work on strategy in organizations and the theorists. are economists and engineers who share a mecha-
. Third are the breakers.’ says Hamel. Strategy has to rediscover passion. says Hamel dismissively. ‘peasants who only keep what the Lord doesn’t want’. Instead they need to look outside of their industry boundaries. are the takers.3 Hamel argues that there are three kinds of companies. They are the aristocracy. a company must have ‘new passions’. Hamel calculates that if you want to see the future coming. Companies which view change as an internal matter are liable to be left behind. ‘The good news is that companies in most industries are blind in the same way. wealth creation requires ‘new voices’. companies such as British Airways and Xerox. he says. Young people are largely disenfranchised from discussions of strategy. First are. People inside the organization must care deeply about the future.’ He argues that there are four preconditions for wealth creating strategies. who is going to capture the new wealth in your industry?’ he says. These are companies Hamel believes are creating the new wealth – and include the likes of Starbucks in the coffee business. We need a hierarchy of imagination. ‘the real makers’. deregulation and globalization are profoundly reshaping the industrial landscape. consistent high achievers. First. well managed. This is not something companies are very good at. Second. ‘Companies should be asking themselves.The Ultimate Business Guru Book
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world – one where digitization.’ he says. ‘There is no inevitability about the future. ‘The primary agenda is to be the architect of industry transformation not simply corporate transformation’.

‘Only non-linear strategies will create new wealth.K Prahalad). but how often does revolution begin with the monarch?’
Notes
1 2 3 Byrne.
Bibliography
Competing for the Future (with C. Gary. 1994. Many will continue to ignore Hamel’s call for a revolution. ‘Three of the busiest new strategists’. Cambridge. 26 August 1996. Fortune.’ There are. London Business School. Hamel calls for ‘new conversations’. Competence–Based Competition (editors Hamel and Aimé Heene). ‘There is a lot of talk about creating wealth for shareholders. Where are the theologists. International Management Symposium. We believe change has to start at the top. there is a need for ‘new perspectives’ – ‘You cannot make people any smarter but you can give them new lenses. ‘Revolutionaries always challenge the orthodoxies of the incumbent. ‘Killer strategies that makes shareholders rich’. other options. Finally. of course.Gary Hamel
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nistic view of strategy. 23 June 1997. MA.’ The trouble is that it is here. It is not a hard thing to do. New York. Business Week. John. We need antidotes to Dilbert. more people need to become involved in the process of strategy creation. 1995. John Wiley. that change needs to begin. 11 November 1997.’ Hamel proclaims.’ says Hamel. Just find a 60-year-old CEO and set a 65year-old retirement age and then guarantee a salary based on the share price growing. the anthropologists to give broader and fresher insights?’ Third. Instead of having the same five people talking to the same five people for the fifth year in a row.
. ‘What we need is not visionaries but activists. Hamel. at the stock option packed top of the organization. It is the easy route. Harvard University Press.

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there are richer or more successful neighbors to compare ourselves with.Charles Handy
“Only one firm can be the industry leader. Competition is healthy. but there has to be more to life than winning or we should nearly all be losers. maybe even essential.” Charles Handy Irish academic and author Born 1932
Breakthrough ideas
Shamrock and federal organizations Future of work
Key books
Understanding Organizations The Age of Unreason The Empty Raincoat (aka The Age of Paradox)
. only one country top economically.

a time when the only prediction that will hold true is that no predictions will hold. The future will be one of ‘discontinuous change’ (a phrase which has now entered the mainstream).
. Charles Handy worked for Shell until 1972 when he left to teach at London Business School. The path through time. Having no knowledge of such things. His work is accessible and popular. Understanding Organizations (1976). Handy tells the story of the Peruvian Indians who saw invading ships on the horizon. From there Handy moved on to the more typically idiosyncratic Gods of Management (1978). Because of this it is dismissed by some – ‘He has an unerring tendency to state the obvious. which was written as much to clarify Handy’s own perspectives on the subject. It was in 1989 with the publication of The Age of Unreason that Handy’s thinking made a great leap forward. The Gods identified by Handy were Apollo (order and rules). with society slowly. naturally and radically improving on a steady course. A time therefore for bold imaginings in private life as well as public. The age of unreason. noted one magazine. which Handy predicts. and Zeus (one dominant leader). for thinking the unlikely and doing the unreasonable’. His first book.The Ultimate Business Guru Book
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Charles Handy (born 1932) is a bestselling writer and broadcaster. when the future. He spent time at MIT where he came into contact with many of the leading lights in the human relations school of thinking including Ed Schein. Athena (task-oriented). Handy has established himself as one of the most mainstream and important of business thinkers. Handy’s early academic career was conventional. It is a comprehensive and readable primer of organizational theory. in so many areas. In his quiet and undemonstrative way. Irish-born. which is ironically one of his strengths’. Suddenly the world mapped out by Handy became an uncertain and dangerous one. they discounted them as a freak of the weather. is ‘a time when what we used to take for granted may no longer hold true. by us and for us. They settled for their sense of continuity.1 Yet Handy has brought major questions about the future of work and of society onto the corporate and personal agenda. gives little hint of the wide-ranging social and philosophical nature of his later work. The blinkers have to be removed. is a thing of the past. is there to be shaped. Dionysus (individualistic).

It is hard to think of things except in the way we have always thought of them. The consequence of such an organizational form is that organizations in the future are likely to resemble the way consultancy firms. and that they and it need also to be obsessed with the pursuit of learning if they are going to keep up with the pace of change. or as leader (the older terms of manager and worker are dropping out of use). The second emergent structure identified by Handy is the federal one. what he calls ‘the shamrock organization’ – ‘a form of organization based around a core of essential executives and workers supported by outside contractors and part-time help’. First and most famously. This is where Handy begins to offer challenges to his audience. Marx and Einstein succeeded through ‘discontinuous’ (or what Handy labels ‘upside down’) thinking. ‘We are all prisoners of our past. Freud. but not necessarily that we ourselves need to change.’ says Handy. as specialist. another word for decentralization. It is not. Explains Handy: ‘The wise organization already knows that their smart people are not to be easily defined as workers or as managers but as individuals.’
. It does not dictate terms or short-term decisions. ‘unreasonably’. These are the type of organization most readily associated with service industries. the way people think will have to change fundamentally. In such organizations the demands on personnel management are large. Intelligence and Ideas. The third type of organization Handy anticipates is what he calls ‘the Triple I’. He points out that people who have thought unconventionally. Handy believes that certain forms of organization will become dominant. The three ‘Is’ are Information. advises and suggests. concerned with long-term strategy. advertising agencies and professional partnerships are currently structured. But that solves no problems and seldom changes anything. In practice. influences. as professional or executives. however. It is ‘at the middle of things and is not a polite word for the top or even for head office’. He provides a blueprint for federal organizations in which the central function co-ordinates. he points out.Charles Handy
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In order to adapt to a society in which mysterious invaders are perpetually on the horizon. We all accept his arguments that things are changing. have had the most profound impact on twentieth-century living. The center is.

He now sets a limit to his audiences of 12. what sort of society. And. Instead he challenges people to spend more time thinking about what they want to do.
. The federal organization allows units and divisions individual independence while preserving corporate unity. what sort of companies. what sort of education and what sort of life we want. As organizations change in the age of unreason so. Business Age. Through federalism Handy believes the modern company can bridge some of the paradoxes it continually faces – such as the need to be simultaneously global and local. an enlightened age of leisure. what sort of capitalism. there are no easy answers. Whether these can be translated into answers for others remains the question and the challenge. Handy predicts. 1 November 1995. We must consider what sort of jobs. reflecting that ‘enough is enough’. more worryingly. Time will not simply be divided between work and play – there could be ‘portfolios’ which spilt time between fee work (where you sell time). He says he has made his last speech to a large audience. perhaps there are no bold generic answers at all. study (keeping up-to-date with your work) and homework and leisure. organizations will demand much more. Handy has reached his own conclusions. ‘an old idea whose time may have come’. will other aspects of our lives. capacities and career patterns. Handy does not predict. he appears to have the answers.000. No one will be able to work simply as a manager. Handy continues to champion the ‘federal’ organization.000 hours in a lifetime rather than the present figure of around 100. Handy also continues gently to pose awkward questions. new people to run them with new skills. Handy has become a one-man case study of the new world of work he so successfully and humanely commentates on.
Notes
1 ‘Good guru guide’. Less time will be spent at work – 50. At a personal level. gift work (for neighbors or charities). as people did in the 1970s.The Ultimate Business Guru Book
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Discontinuity demands new organizations.

It quickly became a great success. Henderson announced that he was leaving to set up his own consultancy. It is like having a map – you just have to ensure it is the right map for the area. Models reassure – even if they are completely wrong. says Weick. ‘Once people begin to act. Models synthesize and persuade. Models are reassuring. BCG is regarded by some as the first pure strategy consultancy. Karl Weick cites the example of a Hungarian army platoon lost in the Alps. The map was for a different area of the Alps. He then joined the management consultancy. an obscure company called Curtiss Aircraft came up with the concept of the ‘learning curve’. Henderson was an engineer who worked as a strategic planner for General Electric. The man who brought business models into the mainstream was the Australian. and what should be done next’. models have traditionally been the domain of economists and strategists who develop understanding by building models of the way the world works. The first model discovered – or re-discovered in this case – by Henderson was something of an antique. Arthur D Little. which also became known as the ‘experience curve’. . Within five years BCG was in the top group of consulting firms – where it has largely remained. the Boston Consulting Group. This posited that unit costs declined as cumulative production increased because of the acquisition of experience. Henderson applied it to strategy rather than production and found that it still worked and provided a useful practical tool. Bruce Henderson (1915–92).
. If a model suggests a distribution of a certain kind. It has been called ‘the most idea driven major consultancy in the world’. they generate tangible outcomes (which) help them discover what is occurring . Models assume that the distilled mass of experience will enable people to make accurate decisions. While managers may rely on experience to predict how their business will respond to their actions. In his book. . In 1963. Sensemaking in Organizations. In the 1920s. strategists and economists rely on their models which are amalgams of many different experiences. In the early 1960s management consulting was beginning to be established as a profession in its own right. This had been applied solely to manufacturing. you know what you are looking for.The Ultimate Business Guru Book
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In the business world. One soldier discovered a map in his pocket and that helped get the troops to safety.

The trouble potentially begins with BCG’s third priority. to take money from cash cows and invest in question-marks. It measures market growth and relative market share for all the businesses in a particular firm. Richard Koch explained them in his Financial Times Guide to Strategy: 1. 2. numbered from 1 to 4 in their order of priority.Bruce Henderson
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The model for which Henderson and BCG are best known is the Growth/Share Matrix. The next call on cash should normally be stars. The hypothesis of this particular framework is that companies with higher market share and growth are more profitable. which BCG said should be minimal or even negative. it should be made without question. 3. These will need a great deal of investment to hold (or gain) relative market share. the stronger a company should be. 4. The most effective use of cash is to defend cash cows. The further to the left a business is on the BCG Matrix.
. if they were run for cash. They should not need to use cash very often. The lowest priority was investment in dogs. BCG then superimposed on the matrix a theory of cash management which included a hierarchy of uses of cash. but if investment in a new factory or technology is required.

‘He was ahead of his time in seeing the threat to American business posed both by Japan and by America’s (and Britain’s) obsession with return on investment. and looking at cash flows. Financial Times Guide to Strategy. 1995.
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‘Bruce weaved it all together in a coherent philosophy of business that highlighted more clearly than ever before the compelling importance of market leadership. selectivity in business. Richard. which he roundly condemned. a low cost position.’1
Notes
1 Koch.’ says Koch. FT/Pitman. London.

But Herzberg’s conclusions were.’ wrote Herzberg and his co-authors in their 1959 book. The strategist Henry Mintzberg is a notable exception to this and so too is Frederick Herzberg (born 1923). benefits. inter-personal relations.’ observed Herzberg. This was hardly a miraculously original approach. it is. rather. The aim should be to motivate people through the job itself rather than through rewards or pressure. the clinical psychologist Herzberg and his colleagues asked 203 Pittsburgh engineers and accountants about their jobs and what pleased and displeased them. personal development. He separated the motivational elements of work into two categories – those serving people’s animal needs (hygiene factors) and those meeting uniquely human needs (motivation factors). as part of their research. . then job dissatisfaction ensues. He wouldn’t have dreamed of asking for their opinion. . job satisfaction and recognition. comes from achievement. salary. True motivation. company policies and administrative practices. ‘When these factors deteriorate to a level below that which the employee considers acceptable. Hygiene factors – also labeled maintenance factors – were determined to include supervision. they serve to bring about poor job attitudes. This further confirmed his conclusion that hygiene factors are the principal creator of unhappiness in work
. It is not a curative. said Herzberg. a preventative . Improvements in these factors of hygiene will serve to remove the impediments to positive job attitudes.The Ultimate Business Guru Book
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It is astonishing how little time is spent by management researchers actually talking to people in real situations. Indeed. Similarly. physical working conditions. and job security. Hygiene alone is insufficient to provide the ‘motivation to work’. Few have treated people in organizations as interesting or even worthy of examination. when there are deleterious factors in the context of the job. Frederick Taylor watched people and measured their performance. Herzberg argued that the factors which provide satisfaction are quite different from those leading to dissatisfaction. In the late 1950s. The Hawthorne experiments treated the people involved as pawns. ‘Hygiene operates to remove health hazards from the environment of man. Herzberg went on to broaden his research base. The Motivation to Work.

’ On his return to the US. there was a hiatus until Herzberg returned to the fray with the publication of an influential article in the Harvard Business Review in 1968. Give the person a monetary incentive? I do not need to remind the reader of the complexity and difficulty involved in setting up and administering an incentive system. The insane also require care and compassion but their insane actions should never be reinforced by ethically neutral strategies. As a psychologist. negative psychological and
. Herzberg studied at the University of Pittsburgh and worked for the US Public Health Service as a clinical psychologist. ‘One More Time: How Do You Motivate Employees?’. After the success of The Motivation to Work.’ Herzberg said that KITA came in three categories: negative physical. then that calls for psychological consultation to determine the reasons for such obstinacy.Frederick Herzberg
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and motivational factors are the route to satisfaction. Herzberg asked: ‘What is the simplest. The article. I believe that sanity requires as much professional attention to nourishing the humanistic content of character and ethics as to showing compassion for differences in personality. If you can’t use him get rid of him. he says.) He was subsequently Professor of Management at the University of Utah. surest. (His first love and subject of study was history – ‘I went to the psychology department to understand people so I could understand history’. Not surprisingly. We need a simple way. Show the person? This means a costly training program. Tell the person? The response shows that he or she does not understand you. this proved a powerful experience. use him. and now an expert in communication methods has to be brought in to show you how to get through. ‘The central core of my work steams from Second World War experiences in Dachau Concentration Camp. has sold over one million copies in reprints making it the Review’s most popular article ever. The roots of Herzberg’s fascination with motivation lay in his experiences when he served in the Second World War and was posted to Dachau concentration camp after its liberation. where I realized that a society goes insane when the sane are driven insane. and most direct way of getting someone to do something? Ask? But if the person responds that he or she does not want to do it.’ The article introduced the helpful motivational acronym KITA (kick in the ass) and argued: ‘If you have someone on a job.

now popular. Similarly. they can select the elements which they recognize as providing their own motivation to work. phrase ‘job enrichment’. motivation comes from within the individual rather than being created by the organization according to some formula. In effect.. there is a trend towards ‘cafeteria’ benefits in which people can choose from a range of options. end-of-year bonuses – too many organizations seem to believe that the only motivation to work is an economic one’.
. employee stock ownership plans. New York. ‘Pay-for-performance. and Snyderman. Herzberg has also coined the. the current emphasis on self-development.). career management and self-managed learning can be seen as having evolved from Herzberg’s insights. Increasingly. and get on with creative expansion of individuals’ roles within them. Herzberg offered a substantially more subtle approach – one that still has much to recommend it. He believes that business organizations could be an enormous force for good. B. provided they liberate both themselves and their people from the thrall of numbers.The Ultimate Business Guru Book
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positive. ‘Treating knowledge assets like Skinnerian rats is hardly the way to get the best out of people. The latter was the preferred method for genuine motivation. B. Wiley. Herzberg’s work has had a considerable effect on the rewards and remuneration packages offered by corporations. Ultimately. says Gary Hamel.’
Bibliography
The Motivation to Work (with Mausner. 1959.

” Geert Hofstede Dutch psychologist Born 1928
Breakthrough ideas
Cultural management
Key book
Culture’s Consequences
. because it is impossible to co-ordinate the actions of people without a deep understanding of their values.Geert Hofstede
“Management within a society is very much constrained by its cultural context. beliefs and expressions.

Culture is reflected in the meanings people attach to various aspects of life. their values-that is. ahead of such luminaries as Kant. Indeed. Culture’s Consequences. These dimensions are:
. adopts a similarly obsessive approach to questionnaires. Derrida. their collective beliefs – what they consider as true and as false. He defines it as ‘the collective programming of the mind which distinguishes the members of one group or category of people from another’. although basically resident in people’s minds. their ways of looking at the world and their role in it.’ Hofstede’s conclusions are based on huge amounts of research. Hofstede concluded that there was a structure in to cultural differences between countries. Mill and Keynes. their artistic expressions – what they consider as beautiful and ugly. Each society faces some similar problems. leaders to their followers. who follows in Hofstede’s footsteps as a Dutch cultural expert. and followers to their leaders. His seminal work on cross-cultural management. teachers to their students. which reinforce the mental programs in their turn. but solutions differ from one society to another. friends to their friends. Hofstede was one of the most cited thinkers. The Dutch academic has exerted considerable influence over thinking on the human and cultural implications of globalization. Hofstede identified five basic characteristics that distinguish national cultures. Few would deny that this is the case.The Ultimate Business Guru Book
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According to The Economist. Geert Hofstede (born 1928) ‘more or less invented [cultural diversity] as a management A subject’. involved over 100. becomes crystallized in the institutions and tangible products of a society. In Hofstede’s hands. One of the fruits of Hofstede’s research into national values and practices was his five-dimensional model. Wittgenstein. Hofstede describes its power in almost lyrical terms: ‘Culture consists of the patterns of thinking that parents transfer to their children. Fons Trompenaars.000 surveys from over 60 countries. The sheer size of Hofstede’s research base leads to perennial questions about how manageable and useful it can be. in the social science citation index reviewing 1400 journals. culture becomes the crux of business. in what they consider as good and as evil. Culture.

Individualism – in some societies the ties between individuals are loose while in others there is greater collectivism and strong cohesive groups.
. the US scores 91 out of 100 for individualism. Game of Budget Control. He trained as a mechanical engineer and wrote his doctoral thesis on ‘The game of budget control’. studies and field observations. Long-term orientation – the extent to which a society exhibits a pragmatic future-oriented perspective. 1997. Sage Publications. Sage Publications. was chief psychologist on the international staff of IBM. 1976.
Bibliography
Uncommon Sense About Organizations: Cases.
Hofstede was greatly influenced by his wartime experiences in occupied Holland. He is founding director of the Institute for Research on Intercultural Co-operation at the University of Limburg. Culture’s Consequences: International differences in work-related values. Garland Publishing. and joined IMEDE. According to Hofstede’s measurements. Guatemala scores six. 1984. Longwood Press. the Swiss business school in 1971.Geert Hofstede •
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•
• • •
Power distance – the extent to which the less powerful members of institutions and organizations expect and accept that power is unequally distributed. New York. He spent time working in factories as a foreman and plant manager. Masculinity – how distinct are social gender roles? Uncertainty avoidance – the extent to which society members feel threatened by uncertain or unknown situations. Along the way he metamorphosed from an engineer into a psychologist and completed a PhD in social psychology. 1984. McGraw Hill. European Contributions to Organizational Theory (with M. At the other end of the scale. 1995. Sami Kassem). Cultures and Organizations: Software of the mind. He has also worked at the European Institute for Advanced Studies in Management in Brussels and at the University of Limburg in Maastricht where he is now Emeritus Professor of Organizational Anthropology and International Management.

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and allowing them to have a say in every problem in which they can help.Elliott Jaques
“I’m completely convinced of the necessity of encouraging everybody to accept the maximum amount of personal responsibility.” Elliott Jaques Canadian psychologist Born 1917
Breakthrough ideas
Time span of discretion Industrial democracy
Key book
A General Theory of Bureaucracy
.

no change of company policy was allowed unless all members of the works council agreed.’ said Eric Trist. Jaques is best known for his involvement in an extensive study of industrial democracy in practice at the UK’s Glacier Metal Company between 1948 and 1965. Any single person on the council had a veto. the Canadian-born psychologist has ploughed an idiosyncratic furrow throughout his career. Contrary to what experts and observers anticipated. Indeed. Jaques worked at Brunel University in the UK and later at George Washington University. Glacier introduced a number of highly progressive changes in working practices. the company did not grind to an immediate halt. Brown served in the Labour government of Harold Wilson and later became Lord Brown. He died in 1985. The emphasis was on granting people responsibility and of understanding the dynamics of group working. ‘I’m completely convinced of the necessity of encouraging everybody to accept the maximum amount of personal responsibility. The experiment was driven forward by the vision and political ideas of the company’s chairman and managing director. A works council was introduced. ‘The project itself produced none of the successors we had anticipated. What the experiment did successfully highlight was the redundancy of conventional organization charts.1 The Glacier research led to Jaques’ 1951 book The Changing Culture of a Factory. Wilfred Brown. and allowing them to have a say in every problem in which they can help’. He was one of the founders of the Tavistock Institute of Human Relations in London. Other innovations at Glacier included the abolition of ‘clocking on’. though his role was more expansive than that. said Jaques.The Ultimate Business Guru Book
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Elliott Jaques (born 1917). ‘We spent the first month just having widespread discussions through the company and gradually we worked through things’. is how Jaques remembers his introduction. the potential power of corporate culture (a concept then barely
. the traditional means of recording whether someone had turned up for work. He was brought into the project as a facilitator. It was a decade ahead of any form of organizational development. This was far removed from the usually toothless attempts at worker representation. His work is based on exhaustive research and has generally been ignored by the mass managerial market.

I think it’s the same issue as why modern natural science hadn’t developed until the seventeenth century and the answer is that they hadn’t as they were ensconced in alchemy. 1 August 1997. This was ornate.’2
Notes
1 2 ‘Here comes the boss’. in titling. London. 1996. I think the major point we’re talking about now. Crane Russak & Co. BBC Radio Four. Jaques presented his theory of the value of work. no concepts. Tavistock. Free Enterprise. which contended that levels of management should be based on how long it was before their decisions could be checked. The field consultancy and gurus and so on is very much like alchemy. 1982. ‘Here comes the boss’. and Wilfred [Brown] was deeply aware of this. Jaques remains convinced of the merits of Glacier’s approach and is roundly dismissive of current managerial fashions: ‘The consultants and the gurus and so on continue to play around with these fantasy fads. and now it’s competency theory and God knows what.
Bibliography
The Changing Culture of a Factory. Fair Employment. in The General Theory of Bureaucracy (1976). and that we’ve not achieved. Requisite Organization (2nd edn).
. John Wiley. Cason Hall & Co. New York. Later. in number of levels. The site of the Glacier factory in Alperton is now a supermarket car park.Elliot Jaques
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understood) and the potential benefits of running organizations in a fair and mutually beneficial way. A General Theory of Bureaucracy. There appears to be no rhyme or reason for the structures that are developed. 1 August 1997.’ His solution was labeled the time span of discretion. and that people should be paid in accordance with that time. or even in the meaning to be attached to the manager-subordinate linkage. BBC Radio Four. This meant that managers were measured by the long-term impact of their decisions. It goes on and on. 1976. 1951. but aimed to clarify something Jaques had observed during his research: ‘The manifest picture of bureaucratic organization is a confusing one. was the need for a scientifically based approach. no rigorous definition and just waffle and fiddling around. empowerment and self-managed teams.

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For the next quarter of a century. In 1953.The Ultimate Business Guru Book
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As a very old man. While Juran is critical of W Edwards Deming as being overly reliant on statistics. Then. at the beginning of the 1980s. the bow-tie wearing Joseph M. the wheel had turned full circle. Juran (born 1904) became an unlikely part of the guru showbiz A set. From being peripheral. the Romanian-born Juran gave seminars on the subject of quality throughout the world. For two months Juran observed Japanese practices and trained managers and engineers in what he called ‘managing for quality’. Juran’s weighty Quality Control Handbook was published in 1951. Juran’s quality philosophy is built around a quality trilogy: quality planning. Western companies continued to assume that the Japanese were low-quality imitators. Juran and his Juran Institute found themselves near the epicenter of an explosion of interest. His pre-retirement tour in 1994 was entitled ‘Last word’ and included the souvenirs usually associated with rock concerts – autographed pictures. he made his first visit to Japan on the invitation of the Japanese Federation of Economic Associations and the Japanese Union of Scientists and Engineers. For Juran. Juran insists that quality cannot be delegated and was an early exponent of what has come to be known as empowerment: for him quality has to be the goal of each employee.
. the world woke up to what Juran had spent his career talking about: quality. Western managers mastered their financial models. Juran was awarded the Second Class Order of the Sacred Treasure by the Emperor of Japan – the highest honor for a non-Japanese citizen – for ‘the development of quality control in Japan and the facilitation of US and Japanese friendship’. quality management and quality implementation. through self-supervision. His approach is less mechanistic than Deming and places greater stress on human relations (though Deming adherents disagree with this interpretation). Juran worked for Western Electric in the 1920s and then AT&T. individually and in teams. Trained as an electrical engineer. bow-tie paperweights. his own approach is based on the forbiddingly entitled Company-Wide Quality Management (CWQM) which aims to create a means of disseminating quality to all. Meanwhile.

Manufacturing products to design specifications and then inspecting them for defects to protect the buyer. Planning for Quality – is that quality is nothing new. . the ancient Chinese had set up a separate department of the central government to establish quality standards and maintain them. can be produced through ‘a road map . The origins of Juran’s thoughts can be traced to his time at Western Electric. Where Juran is innovative is in his belief that there is more to quality than specification and rigorous testing for defects. Similarly. . says Juran. ‘In broad terms. Instead of waiting at the end of a production line to count the defective products. Making them right in the first place is the job of the production department. was something the Egyptians had mastered 5000 years previously when building the pyramids. Juran analyzed the large number of tiny circuit breakers routinely scrapped by the company. Juran’s message – most accessibly encapsulated in his book. Juran developed his all-embracing theories of what quality should entail. They were not impressed and told Juran that this wasn’t his job: ‘We’re the inspection department and our job is to look at these things after they are made and find the bad ones. Juran looked at the manufacturing process as a whole. quality planning consists of developing the products and processes required to meet the customers’ needs. These are:
. This is a simple. He came up with a solution and offered it to his bosses. Juran
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Juran places quality in a historical perspective. but daunting message. The human side of quality is regarded as critical.’ In response. an invariable sequence of steps.’
Quality planning. he points out. quality planning comprises the following basic activities: • • • identify the customers and their needs develop a product that responds to those needs develop a process able to produce that product.Joseph M. More specifically. If quality is so elemental and elementary why had it become ignored in the West? Juran’s unwillingness to gild his straightforward message is attractive to some. but has made the communication of his ideas less successful than he would have liked.

1964.
. McGraw Hill.The Ultimate Business Guru Book • • • • • • • • •
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identify who are the customers determine the needs of those customers translate those needs into our language develop a product that can respond to those needs optimize the product features so as to meet our needs as well as customers’ needs develop a process that is able to produce the product optimize the process prove that the process can produce the product under operating conditions transfer the process to the operating forces. Juran on Planning for Quality.’
As with so many other recipes for quality. New York.
Bibliography
Managerial Breakthrough. Free Press. 1988. Juran’s is more far reaching and difficult to achieve than a list of bullet-points can ever suggest. New York.

makers and traders are the DNA of the world class company.” Rosabeth Moss Kanter American academic and consultant Born 1943
Breakthrough ideas
Empowerment The post-entrepreneurial firm
Key books
Change Masters World Class
.Rosabeth Moss Kanter
“Thinkers.

She has also been a Fellow in Law and Social Sciences and a visiting scholar at Harvard Law School. Rosabeth Moss Kanter (born 1943) belongs solidly in this second camp. Moss Kanter is the former editor of the Harvard Business Review (1989–92) and co-founded the consulting company Goodmeasure in 1977– she is now its chair. The idealistic bent of her thinking is tempered by and grounded in reality. Ford and GE. Rosabeth Moss Kanter began her career as a sociologist before the transformation into international business guru. She taught at Brandeis and Harvard Universities (1967–77) and at Yale (1977–86). but she takes no prisoners –’I was really at the cutting edge of new management theory. Rosabeth Moss Kanter learnt hers hanging around in the counter-culture. Corporate giants. there is also a very strong American humanistic tradition which puts individuals at the center of its world view. My writings offer enduring lessons. For someone who tends to the utopian. The sociologist within Kanter remains strong. is based on the corporate application and basis of her thinking. however. Her success. ‘Kanter-the-guru still studies her subject with a sociologist’s eye. It was a premature epitaph for corporate man and corporate America before downsizing and technology hit home. Her standards are informed. rubbing shoulders with the sort of gurus who believe in founding communes rather than re-inventing corporations. treating the corporation not so much as a microeconomy. create and nurture their own mythology and culture. Her opinions are backed to the hilt by research. but it wasn’t just a fad. concerned with turning inputs into outputs. graduated from Bryn Mawr and has a PhD from the University of Michigan. but as a mini-society. Her perspective is resolutely humane. Kanter is a diligent and persuasive commentator on industrial reality. She is now Class of 1960 Professor of Business Administration at Harvard Business School. bent
. In her earlier incarnation she examined utopian communities. ‘Most management gurus learn their craft by taking MBAs and serving time in business schools or consultancies.’ observed one magazine. IBM. Men and Women of the Corporation (1977) looked at the innermost working of an organization.The Ultimate Business Guru Book
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The United States’ managerial tradition tends to remain centered on a corporate perspective. However.’1 Kanter. She may talk about ‘soft’ issues.2 Her first book. an isolated female figure in any gathering of management thinkers. such as General Motors.

And third is an understanding of how change is designed and constructed in an organization – how the microchanges introduced by individual innovators relate to macrochanges or strategic reorientations. This is driven by smaller organizations.Rosabeth Moss Kanter
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on shaping individuals to collective ends. Key to this is the entire idea of innovation. Mary Parker Follett.’ says The Economist. ‘Three new sets of skills are required to manage effectively in such integrative.’ (Kanter also has a talent for jargon – she has forwarded the case for ‘employability’ among other sins against language purity. support. This has been a recurrent theme of Kanter’s since her first really successful book. In the book she defines change masters as ‘those people and organizations adept at the art of anticipating the need for. Second is the ability to manage the problems associated with the greater use of teams and employee participation. Change Masters – sub-titled ‘Innovation and entrepreneurship in the American corporation’. writes Kanter. At the opposite end to the change masters are the ‘change resisters’ intent on reining in innovation. (This has distinct echoes of the theories of that other female management theorist. The key to developing and sustaining innovation is. productive change’. Change is fundamentally concerned with innovation (or ‘newstreams’ in Kanterspeak). ‘First are power skills – skills in persuading others to invest information. or at least less monolithic organizations. and of leading. and resources in new initiatives driven by an entrepreneur. says Kanter. ‘The degree to which the opportunity to use power effectively is granted to or withheld from individuals is one operative difference between those
. whose work Kanter admires. She introduced the concept of the post-entrepreneurial firm which manages to combine the traditional strengths of a large organization with the flexible speed of a smaller organization.) American woes are firmly placed at the door of ‘the quiet suffocation of the entrepreneurial spirit in segmentalist companies’. innovation-stimulating environments’. Kanter has mapped out the potential for a more people-based corporate world.) Kanter was partly responsible for the rise in interest – if not the practice – of empowerment. an ‘integrative’ approach rather than a ‘segmentalist’ one.3 Moving on from her intricate examination of corporate life.

New York. 15 October 1994. Boston. She is researching the dynamics of cross-border partnership and alliances as well as the local impact of the global economy. Financial Times. The Economist. Griffith. Recently she has expressed grave doubts about whether the corporate hype about the subject goes anywhere near matching reality –’Managers may say they’re empowering employees. & Jick. 1977. The Challenge of Organizational Change (with Stein. 17 May 1996. she says. Free Press. ‘It’s a people thing’. 24 July 1997. corporate sociologist’. New York. ‘It’s a people thing’. London. Harvard Business School Press. The Economist. ‘I think we’re going to see multinationals playing a very different role. Kanter has been carrying out research into globalization and cross-boundary management. D. ‘An interview with Rosabeth Moss Kanter’. ‘Moss Kanter. T. New York. she predicts. New York.
. MA.
Notes
1 2 3 4 5 Griffith. Financial Times.
Bibliography
Men and Women of the Corporation. Victoria.).. but how many are really doing it?’4 She has also championed the broader social responsibilities of organizations. ‘Moss Kanter. Basic Books. 1992. When Giants Learn to Dance. 24 July 1997. 1997. The Change Masters. Victoria. Simon & Schuster. 1989. corporate sociologist’. Rosabeth Moss Kanter on the Frontiers of Management. 1995. for instance. Quoted in Dickson. Simon & Schuster. 15 October 1994. Tim. World Class: Thriving locally in the global economy. needing to be good corporate citizens because the regions in which they operate will draw them into a wider range of activities’. Financial Times.The Ultimate Business Guru Book
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companies which stagnate and those which innovate’. 1983.5 More recently. B. Simon & Schuster.

great companies will create markets.” Philip Kotler American academic Born 1931
Breakthrough ideas
Recognition of marketing as a central business function
Key book
Marketing Management
.Philip Kotler
“Good companies will meet needs.

says Kotler.The Ultimate Business Guru Book
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Philip Kotler (b. 1931) is a Chicagoan whose influence on the subject of marketing is matched only by his productiveness. ‘When I am asked to define marketing in the briefest possible way I say marketing is meeting needs profitably. I probably wasn’t going to make a difference in that field’. I was attracted to very tangible problems that economists don’t deal with. he is also the author of over 100 articles. He then joined Northwestern University becoming professor of marketing in 1969. The author of countless books. and exchanging products of value with others’. Kotler worked as an analyst for Westinghouse in Pittsburgh and was then an assistant professor at Chicago’s Roosevelt University from 1957 until 1961. there isn’t much selling work to do because the word gets out from delighted customers that this is a wonderful solution to our problems.’1 Kotler did his postdoctoral work in mathematics at Harvard University and in behavioral science at the University of Chicago. such as: how much do you spend on advertising? What’s a sensibly sized sales force? How do you really set prices intelligently? I got into the mindset of a market. he received his Master’s degree in economics from the University of Chicago and a PhD from MIT. Kotler has coined phrases such as ‘mega marketing’. While championing the role of marketing over 30 years. Kotler was a student at DePaul University from 1948 until 1950.’2 Elsewhere. He has a penchant for useful definitions. A lot of us meet needs – but businesses are set up to do it profitably. ‘demarketing’ and ‘social marketing’. offering. ‘At the same time. He went on to explain the concept of a market as consisting ‘of all the potential customers sharing a particular
. translated into over 20 languages. Kotler has defined marketing as ‘a social and managerial process by which individuals and groups obtain what they need and want through creating. Marketing is the homework that you do to hit the mark that satisfies those needs exactly. When you do that job. At Chicago he was taught by Milton Friedman and at MIT by Paul Samuelson –’I concluded that if those two great minds couldn’t agree on economic issues. Subsequently. Marketing Management (now in its eighth edition). His books include the definitive textbook on the subject.

’ says Kotler.’ Total customer value is made up of product value. He says that a product has five levels: the core benefit (‘Marketers must see themselves as benefit providers’).Philip Kotler
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need or want who might be willing and able to engage in exchange to satisfy that need or want’. Kotler also originated ‘social marketing’ with Gerald Zaltman. any dedication. and ideas to create exchanges with target groups that satisfy customer and organizational objectives’. (‘Satisfying is silent. the augmented product (the additional services or benefits added to the product) and. and distribution of goods. Ibis is the idea that an element of marketing is to dissuade customers from desiring a particular product or service. And total customer value is the bundle of benefits customers expect from a given product or service. pricing. When you satisfy the customer you haven’t created any noise. But Kotler’s most enduring achievement is to have marketed his chosen subject so successfully. ‘Before he came on the scene. acquisition. Kotler brought to marketing thinking and writing an analytical orientation and made it an acceptable academic discipline. you enjoy it. The two are combined to produce customer delivered value. promotion. personnel value and image value. you have to try and delight the customer. Kotler also provides a useful definition of a product as ‘anything that can be offered to a market for attention. or consumption that might satisfy a want or need’. services. In the 1970s. the potential product (‘all of the augmentations and transformations that this product might ultimately undergo in the future’). This explained the use of marketing in the dissemination of socially useful ideas. Total customer cost is made up of monetary price. He has also explored what he labels ‘customer delivered value’– defined as ‘the difference between total customer value and total customer cost. Levy. time cost. service value. finally. the expected product (the normal expectations the customer has of the product). use. marketing writing and teaching was largely a matter of describing marketing functions.’ says Warwick University’s Peter Doyle. the generic product. Marketing management therefore ‘is the process of planning and executing the conception.) Among Kotler’s innovations have been ‘demarketing’ – which Kotler coined with Sydney J. energy cost and psychic cost.3
. any devotion – so now we say. You don’t just do it.

they came to see marketing as marketing analysis. ‘Good customers are an asset which. over time. skills. when to launch new brands and when to extend existing brand names. and then regarded marketing as positioning. In the banking industry. ‘Marketers must know when to cultivate large markets and when to niche. 2. when to protect the domestic market and when to penetrate aggressively into foreign markets. Then it was taken to be smiling and providing a friendly atmosphere. and when to expand and when to contract their budgets for salesforce. will return a handsome lifetime income stream to the company. tools. which celebrates and redefines marketing with each new edition. planning and control. the company’s first order of business is to retain customer loyalty through continually satisfying their needs in a superior way. In order to become marketing-oriented. Marketing Management.The Ultimate Business Guru Book
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Kotler has also written the marketing bible. ‘The marketing discipline is redeveloping its assumptions. Fast forgetting – companies which embrace marketing concepts tend. when to push products through distribution and when to pull them through distribution. Organized resistance – entrenched functional behavior tends to oppose increased emphasis on marketing as it is seen as undermining functional power bases. and other marketing tools. concepts.’ says Kotler. when to add more benefits to the offer and when to reduce the price. Kotler believes organizations encounter three common hurdles: 1. Slow learning – most companies are only capable of slowly embracing the marketing concept. writes Kotler in the most recent edition. In the intensely competitive marketplace.’ The central shift that Kotler has described is from ‘transaction oriented’ marketing to ‘relationship marketing’. Various US companies have sought to establish their products in Europe with little knowledge of the differences in the marketplace. Finally. In the first marketing was regarded as sales promotion and publicity. advertising. 3. and systems for making sound business decisions’. to lose touch with core marketing principles. when well managed and served. Kotler says that marketing has passed through five stages. Banks moved on to segmentation and innovation.
.

Ted Levitt
“If you are not thinking customer. you are not thinking.” Ted Levitt American academic Born 1925
Breakthrough ideas
Marketing Globalization
Key books
Innovation in Marketing The Marketing Imagination
.

It was. My scheme. He argued that companies must broaden their view of the nature
. the fact that companies were production-led was not open to question. JB McKitterick.000 reprints and has entered a select group of articles that have genuinely changed perceptions. a lucky break. In 1954 he wrote: ‘Marketing is not a function. ‘Marketing myopia’ has sold over 500. Nor was it a new idea – Peter F Drucker.’2 Drucker had argued that. since the role of business was to create customers. Companies should be marketing-led rather than production-led and the lead must come from the chief executive and senior management –’Management must think of itself not as producing products but as providing customer-creating value satisfactions.’ (In his ability to coin new management jargon. however.The Ultimate Business Guru Book
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The July/August 1960 issue of the Harvard Business Review launched the career of Ted Levitt (born 1925). and Neil Borden had each done more original and balanced work on the marketing concept.1 The article propelled the German-born Levitt to prominence. (Even so. As markets have matured and become more competitive. Wroe Alderson. It included his article entitled ‘Marketing myopia’ which.) At the time of Levitt’s article.) Levitt observed that production-led thinking inevitably led to narrow perspectives. Henry Ford’s success in mass production had fueled the belief that low-cost production was the key to business success. it was intended as manifesto. tied marketing more closely to the inner orbit of business policy. its only two essential functions were marketing and innovation. Levitt was ahead of his time. it is the whole business seen from the customer’s point of view’. In 1975 he reflected: ‘Marketing myopia was not intended as analysis or even prescription. totally unexpectedly. this 40-year-old concept has become increasingly widely accepted. brought marketing back onto the corporate agenda. long after they had decided otherwise. Levitt saluted Ford’s marketing prowess. arguing that the mass production techniques he used were a means to a marketing end rather than an end in themselves. he admits. especially during the 1990s. John Howard. as well as his thinking. Ford persisted in his belief that he knew what customers wanted. In ‘Marketing myopia’ Levitt argued that the central preoccupation of corporations should be with satisfying customers rather than simply producing goods.

‘They let others take customers away from them because they assumed themselves to be in the railroad business rather than in the transportation business. with companies ‘obsessively responsive to every fleeting whim of the customer’. ‘The railroads are in trouble today not because the need was filled by others . History. Growth. wrote Levitt. In ‘Marketing myopia’ Levitt also made a telling distinction between the tasks of selling and marketing. by a lack of willingness to expand its horizons. wrote Levitt. Second is the belief that a product cannot be surpassed. there is no such thing as a growth industry’. And it does not. there is a tendency to place faith in the ability of improved production techniques to deliver lower costs and therefore higher profits. Levitt’s article and his subsequent work pushed marketing to center stage. they were product-oriented instead of customer-oriented. . Levitt went on to level similar criticisms at other industries. First. they assume that the growth in their particular market will continue so long as the population grows in size and wealth. Indeed. Third. Growth is not a matter of being in a particular industry. but in being perceptive enough to spot where future growth may lie. create. and satisfy customer needs. arouse. view the entire business process as consisting of a tightly integrated effort to discover.’ he writes. The
. This was picked up again in the 1980s when marketing underwent a resurgence and companies began to heed Levitt’s view that they were overly oriented towards production. The film industry failed to respond to the growth of television because it regarded itself as being in the business of making movies rather than providing entertainment. is filled with companies which fall into ‘undetected decay’ usually for a number of reasons. ‘The railroad business was constrained. said Levitt. in Levitt’s view. in some cases it led to what Levitt labeled ‘marketing mania’. The reason they defined their industry wrong was because they were railroad-oriented instead of transportation-oriented. Otherwise their customers will soon be forgotten.Ted Levitt
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of their business. ‘Selling concerns itself with the tricks and techniques of getting people to exchange their cash for your product. as marketing invariably does. but because it was not filled by the railroads themselves’. . It is not concerned with the values that the exchange is all about. can never be taken for granted –’In truth.

September–October 1975.’ he said. ‘Marketing myopia 1975: retrospective commentary’. He attributed this to his voracious curiosity: ‘I go into factories. and Hamel and Prahalad’s ‘The core competence of the corporation’. Harvard Business Review. Thinking About Management. New York. 1983.The Ultimate Business Guru Book
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main thrust of the article has stood the test of time (‘I’d do it again and in the same way’. ‘The world is becoming a common marketplace in which people – no matter where they live – desire the same products and lifestyles. The Marketing Imagination. stores and look out the window and ask why? Why are they doing that? Why are things this way and not that? You ask questions and pretty soon you come up with answers. 1969. Levitt spent all his career at Harvard Business School and was editor of the Harvard Business Review for four years. New York. New York.
Notes
1 Other career-enhancing HBR articles include Robert Hayes and William Abernathy’s ‘Managing our way to economic decline’. McGraw Hill. He consistently revealed a reliable antennae for business trends. Levitt signaled the emergence of a major movement and then withdrew to watch it ignite. 1991.
. New York.
2
Bibliography
Innovation in Marketing. Global companies must forget the idiosyncratic differences between countries and cultures and instead concentrate on satisfying universal drives. Levitt. In the same way as he had done with ‘Marketing myopia’. Frederick Herzberg’s ‘One more time how do you motivate employees?’. Free Press. commented Levitt in 1975). Free Press. Ted. 1962. McGraw Hill.’ Levitt’s other major insight was on the emergence of globalization. The Marketing Mode.

” Kurt Lewin German-born American psychologist 1890–1947
Breakthrough ideas
T-groups Field theory
Key book
A Dynamic Theory of Personality
.Kurt Lewin
“Nothing is so practical as a good theory.

Kenneth Benne and Leland Bradford who turned NTL into a reality. T-Groups were a means of making this happen. going on to pay tribute to Lewin’s colleagues Ronald Lippitt. The groups were christened ‘T-Groups’ (the T stood for training). Prior to his death from a heart attack. ‘NTL crackled with intellectual energy and the heady sense that some major discovery about the real nature of groups was taking place’. Chris Argyris and Ed Schein. in an era still dominated by Scientific Management. Keen to take the idea forward. He was Professor of Philosophy and Psychology at Berlin University until 1932 when he fled from the Nazis to America. This research found that the more democratic groups worked most effectively. These included Warren Bennis. Douglas McGregor. The National Training Laboratories for Group Dynamics were established in Bethel and proved highly influential. A suitable location – an old school in Bethel.1
. He was then Professor of Child Psychology at the Child Welfare Research Station in Iowa until 1944. he worked at MIT – with Douglas McGregor among others – founding a research center for group dynamics. An entire generation of human relations specialists became involved. In 1946 Lewin was called into a troubled area of Connecticut to help create better relations between the black and Jewish communities. Lewin began making plans with his associates to establish a ‘cultural island’ where T-Groups could be examined more closely.The Ultimate Business Guru Book
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Kurt Lewin (1890–1947) was a German-born psychologist. The theory underlying T-Groups and the Lewin model of change was that behavior patterns need to be ‘unfrozen’ before they can be changed and then ‘refrozen’. Robert Blake. In the 1940s Lewin carried out research at boys’ clubs in Iowa City. This hardly seems a staggering conclusion but. Here it was found that bringing together groups of people was a very powerful means of exposing areas of conflict. corporate dictatorship was the order of the day. recalls Warren Bennis. Maine – was identified shortly before Lewin’s premature death. Groups of boys were given leaders with different leadership styles and the ways in which the groups responded and worked was recorded by Lewin and his colleagues.

Lewin’s premature death robbed the human relations movement of its central figure. 1948. McGraw Hill. 1936. Resolving Social Conflicts: Selected Papers on Group Dynamics (ed. 1951. Cartwright. New York. Field Theory in Social Science: Selected Theoretical Papers (ed. While the NTL had an impact on a large number of people. Harper & Row. New York. Kurt. Gertrude Lewin). Wokingham. Harper & Row. 1935. Warren. Lewin. Harper & Row. 1993. Principles of Topological Psychology. An Invented Life.Kurt Lewin
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Lewin also originated ‘field theory’.).
. this was dissipated as they moved off to institutions throughout the world. New York. A field was defined as ‘the totality of coexisting facts which are conceived of as mutually inter-dependent’2 and field theory had three basic principles: • • • behavior is a function of the field that exists at the time the behavior occurs analysis begins with the situation as a whole from which are differentiated the component parts the concrete person in a concrete situation can be represented mathematically.
Notes
1 2 Bennis. Indeed. McGraw Hill. Addison-Wesley. New York. the NTL’s legacy was most fully explored thousands of miles away at the Tavistock Institute in London. D.
Bibliography
A Dynamic Theory of Personality. Field Theory in Social Science (ed. Cartwright). D. New York. 1951.

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Douglas McGregor
“The motivation. are all present in people. the potential for development.” Douglas McGregor American academic 1906–64
Breakthrough ideas
Motivational theories X and Y
Key book
The Human Side of Enterprise
. . . the capacity for assuming responsibility . Management does not put them there.

including Warren Bennis and Ed Schein. He then moved to MIT as an assistant professor of psychology. The inference from this was that McGregor was HR-oriented. He graduated from the City College of Detroit (now Wayne University) in 1932.The Ultimate Business Guru Book
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Even though he died over 30 years ago. lots of Theory Y managers were autocrats.’2 As Schein suggests. At the time Ed Schein joined MIT in 1956. The ineffective manager is cynical and mistrusts people. In the process people began to attribute participative approaches to McGregor. Yet. McGregor attracted some of the emerging generation of thinkers to work with him. He then went on to Harvard to study for a PhD Following his PhD McGregor worked at Harvard as an instructor and tutor in social psychology. says Warren Bennis. McGregor never took a position on how participatory leaders should be. In fact. ‘I think he has always been misunderstood. He became Sloan Fellows Professor of Industrial Management in 1962. says Schein. In 1948 he became President of Antioch College in Yellow Springs. ‘Doug was not a great scholar. At MIT. McGregor was the son of a clergyman. ‘McGregor had a gift of getting toward the zone of understanding that would truly affect practitioners’. The Human Side of Enterprise. In 1954. ‘McGregor was my mentor at MIT’. Plenty of Theory X managers were participative and screwed everything up. McGregor’s reputation was rapidly growing. Douglas McGregor (1906–64) remains one of the most influential thinkers in the sphere of human relations.’1 Detroit-born. Antioch was renowned as a progressive liberal college. McGregor returned to MIT as a Professor of Management. McGregor remains best known for his division of motivational theory into Theory X and Theory Y (These were the centerpiece of his 1960 classic. but they were still autocrats. ‘broad-grinned and tweedy from MIT’. a student and protégé of McGregor. They did trust people. but he had that quality of unbridled lucidity for taking what was then referred to as behavioral science research and employing it in a way that it would really have resonance for practitioners. Warren Bennis remembers McGregor’s arrival. Ohio. But he was stating a fact of life rather than a prescription.) Theory X was traditional carrot
. He observed that the more efficient manager tends to be the one who values and trusts people upfront.

needed to be supervised and motivated. wants to avoid responsibility. wrote McGregor. McGregor lamented that Theory X ‘materially influences managerial strategy in a wide sector of American industry’. aspirations and behavior of people. and observed ‘if there is a single assumption that pervades conventional organizational theory it is that authority is the central. were ‘(1) that the average human has an inherent dislike of work and will avoid it if he can (2) that people therefore need to be coerced. indispensable means of managerial control’. but organizations which have transformed the perspectives. If this was the case. before going on to conclude that ‘this behavior is not a consequence of man’s inherent nature. (2) external control and threat of punishment are not the only means for bringing about effort toward a company’s ends. and threatened with punishment to get them to put forward adequate effort toward the organization’s ends and (3) that the typical human prefers to be directed. (4) the average human being learns. The premises of Theory X. McGregor described the assumptions behind Theory Y: ‘(1) that the expenditure of physical and mental effort in work is as natural as in play or rest – the typical human doesn’t inherently dislike work. policy. and then to liberate his or her abilities on behalf of those objectives.Douglas McGregor
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and stick thinking built on ‘the assumption of the mediocrity of the masses’. then organizations needed to develop the individual’s commitment to its objectives. The other extreme was described by McGregor as Theory Y. and wants security above all’. and regarded work as a necessary evil to provide money. based on the principle that people want and need to work. and (5)
. It is a consequence rather of the nature of industrial organizations. has relatively little ambition. wrote McGregor. This assumed that workers were inherently lazy. (3) commitment to objectives is a function of the rewards associated with their achievement – the most important of such rewards is the satisfaction of ego and can be the direct product of effort directed toward an organization’s purposes. under the right conditions. and practice. of management philosophy. controlled.’ It is not people who have made organizations. not only to accept but to seek responsibility. directed. ‘The human side of enterprise today is fashioned from propositions and beliefs such as these’.

ingenuity. McGregor helped design a Proctor & Gamble plant in Georgia. distributed in the population. said McGregor. manual skills. two incompatible ends of an endless spectrum. concern for employees including their social life. decisions made by consensus. not narrowly. To counter this. Built on the Theory Y model with self-managing teams its performance soon surpassed other P&G plants. If they don’t behave as we desire. effective application of this theory than it was to build an atomic power plant in 1945. before he died in 1964. The last element was. McGregor was developing Theory Z. he analyzed Japanese working methods. he found fertile ground for many of the ideas McGregor was proposing for Theory Z – lifetime employment. it isn’t considered good taste to give this kind of feedback in most social settings. In the early 1950s. a theory which synthesized the organizational and personal imperatives. then in their early stages. excellent transmittal of information from top to
. outside the confines of normal teaching and learning methods. their peculiarities. McGregor was realistic: ‘It is no more possible to create an organization today which will be a full.’ It is worth noting that Theory Y was more than mere theorizing. Instead. and creativity in the solution of organizational problems is widely. Here.’ Theories X and Y were not simplistic stereotypes.The Ultimate Business Guru Book
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the capacity to exercise a relatively high degree of imagination. McGregor also examined the process of acquiring new skills and identified four kinds of learning relevant for managers: intellectual knowledge. Above all. informal control. The common complaint against McGregor’s Theories X and Y is that they are mutually exclusive. in which group participation was used to help people extend their insights in their own and other people’s behavior. their adjustment. ‘We normally get little feedback of real value concerning the impact of our behavior on others. it is discussed by our colleagues when we are not present to learn about it. The concept of Theory Z was later seized upon by William Ouchi (see Appendix). and social interaction. In his book of the same name. it is easy to blame their stupidity. problem-solving skills. slow promotion. There are many formidable obstacles to overcome.’ McGregor recommended the use of T-Groups.

’
Notes
1 2 Profile of Warren Bennis’. his work deserves recognition for its impact on human relations as a whole. we will provide a model for governments and nations which mankind sorely needs.
. 1960.
Bibliography
The Human Side of Enterprise.Douglas McGregor
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bottom and bottom to top with the help of middle management. While Theories X and Y dominate McGregor’s legacy. commitment to the firm and high concern for quality. 93/3. His ambition remains as relevant today: ‘If we can learn how to realize the potential for elaboration inherent in the human resources of industry. Interview with the author. Organization Frontier. McGraw Hill. New York. June 1997.

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nor select anything else for his study. than war and its rules and discipline.” Nicolo Machiavelli Florentine diplomat and author 1469–1527
Breakthrough ideas
Power and leadership
Key book
The Prince
. for this is the sole art that belongs to him who rules.Nicolo Machiavelli
“A Prince ought to have no other aim or thought.

‘The most influential business strategist ever born. (Indeed. They have been preoccupied with authority rather than making things happen. Within it. Machiavelli’s career came to an end in 1512 when the Medicis returned to power.’ concludes Tom Peters. ‘I believe also that he will be successful who directs his actions according to the spirit
. His work brought him into contact with some of Europe’s most influential ministers and government representatives. for that power is produced by him either through craft or force.) Machiavelli portrayed a world of cunning. you are. Management and Machiavelli developed the comparisons. Business Age summed his career up. perhaps sadly. ‘Powerlessness is a state of mind. His is the last word on the subject. ‘Whoever is the cause of another becoming powerful. ‘Adversarial power relationships work only if you never have to see or work with the bastards again’. He was then exiled from the city and later accused of being involved in a plot against the government. During 14 years as Secretary of the Second Chancery. If you think you’re powerless. said Machiavelli. Nicolo Machiavelli served as an official in the Florentine government. with books on politics as well as plays and a history of Florence.’ notes Charles Handy. lie a ready supply of aphorisms and insights which are. divide and rule. says Peter Drucker. and both of these are suspected by the one who has been raised to power’. he became known as the ‘Florentine secretary’ and served on nearly 30 foreign missions. Machiavelli was a useless businessman’. For this he was imprisoned and tortured on the rack. intrigue and brutal opportunism. embedded beneath details of Alexander VI’s tribulations.1 Machiavelli’s bible on power is The Prince. He then retired to a farm outside Florence and began a successful writing career.The Ultimate Business Guru Book
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Power is a fact of corporate life. is how the magazine. While virtually everyone has expressed an opinion on power. Antony Jay’s 1970 book. ‘Managers have been brought up on a diet of power. His chief diplomatic triumph occurred when Florence obtained the surrender of Pisa. its patron saint is uncontested: the Florentine diplomat and author Nicolo Machiavelli (1469–1527). is ruined himself. as appropriate to many of today’s managers and organizations as they were half a millennium ago.

’ Machiavelli advised. disorders are seen as they spring up. . another by its opposite. Take Machiavelli on managing change: ‘There is nothing more difficult to take in hand. one by patience. Like all great self-improvement writers. do it. another with haste. Success. he wrote. and one can quickly remedy them. but if one is not at hand. and one of the greatest and most real helps would be that he who has acquired them should go and reside there . he said. ‘It is unnecessary for a prince to have all the good qualities I have enumerated.Nicolo Machiavelli
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of the time. and then one can no longer remedy them. or more uncertain in its success. ‘Because men are seen. Because if one is on the spot. customs. Machiavelli was at his best in discussing leadership. one with caution. than to take the lead in the introduction of a new order of things’. was not down to luck or genius. or laws. namely. Or on sustaining motivation: ‘He ought above all things to keep his men well-organized and drilled. he offered something for everyone. Machiavelli also examined the perils facing the self-made leader when he (the thought of a ‘she’ would have been
. to get there by various methods. But Machiavelli went beyond such helpful presentational hints. and each one succeeds in reaching the goal by a different method. one by force. to follow incessantly the chase’. another by skill. There was even talk of what would now be called empowerment in Machiavelli’s work – ‘The Masses are more knowing and more Constant than is a Prince’ is the title of one of his Discourses which concludes ‘government by the populace is better than government by princes’.’ Executives throughout the world will be able to identify with Machiavelli’s analysis. but it is very necessary to appear to have them. but ‘happy shrewdness’. they are heard of only when they are great. glory and riches. Machiavelli even had advice for executives acquiring companies in other countries: ‘But when states are acquired in a country differing in language. in affairs that lead to the end which every man has before him. and good fortune and great energy are needed to hold them.’ If it works. and that he whose actions do not accord with the time will not be successful’. there are difficulties. more perilous to conduct. . adding the suggestion that it is useful ‘to be a great pretender and dissembler’.

1967. Machiavelli had a dismal view of human nature.’ Above all. but the leader ‘should know how to enter into evil when necessity commands’. 1 November 1995. Unfortunately. as he sagely pointed out. they have not any difficulties on the way up.
Bibliography
The Prince.The Ultimate Business Guru Book
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impossible for him to contemplate) reached the dizzy heights: ‘Those who solely by good fortune become princes from being private citizens have little trouble in rising. Business Age. but they have many when they reach the summit. It is all very well being good. London. Penguin. but much in keeping atop. said Machiavelli. the triumph of force over reason. because they fly.
.
Notes
1 The good guru guide’. history has repeatedly proved that a combination of being armed to the teeth and devious is more likely to allow you to achieve your objectives. An admirer of Borgia. Machiavelli was the champion of leadership through cunning and intrigue.

” Abraham Maslow American behavioral psychologist 1908–70
Breakthrough ideas
Hierarchy of needs
Key books
Motivation and Personality Eupsychian Management
.Abraham Maslow
“It seems clear to me that in an enterprise. practically all other questions then become simple technical questions of fitting means to the ends. then all the discussions of techniques and methods and means in the world will be of little use. if everybody concerned is absolutely clear about the goals and objectives and far purposes of the organization. But it is also true that to the extent that these far goals are confused as conflicting or ambivalent or only partially understood.

its flaw lies in the nature of humanity. may be characterized as living almost for safety alone. an artist must paint. In 1951 he moved to Brandeis University to become professor of social psychology and department chairman. The hierarchy parallels the human life cycle.’ said Maslow. In this. What a man be ‘he must be.The Ultimate Business Guru Book
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The behavioral psychologist Abraham Maslow (1908–70) was a member of the Human Relations School of the late 1950s. he was plant manager at the Maslow Cooperage Corporation in Pleasanton. When asked what
. in this state. He also spent some time studying primates – one of his earliest papers was on primate behavior in the Bronx Park Zoo. But what happens to man’s desires when there is plenty of bread and when his belly is chronically filled?’ Maslow asked. Born in Brooklyn. he trained at the University of Wisconsin. if he is to be ultimately at peace with himself. ‘A man. California. Between 1937 and 1951. between 1945 and 1947. wrote Maslow in Motivation and Personality. While the hierarchy of needs provides a rational framework for motivation. needs. if it is extreme enough and chronic enough. Also. with each need being satisfied comes what Maslow labeled ‘self-actualization’. there then emerges a new set of needs.’1 Next on the hierarchy are social or love needs. during this time. others emerge to dominate. ‘A musician must make music. and ego. First are the fundamental physiological needs of warmth. ‘If the physiological needs are relatively well gratified. ‘It is quite true that man lives by bread alone – when there is no bread. he argued that there was an ascending scale of needs which need to be understood if people are to be motivated. shelter and food. the individual achieves their own personal potential. as man moves up the scale. Once basic physiological needs are met. Man always wants more. After receiving his PhD in 1934 he worked as a research fellow at Teachers College of Columbia University. he was an associate professor at Brooklyn College. Maslow is best known for his ‘hierarchy of needs’ – a concept which was first published by Maslow in 1943. a poet must write. which we may categorize roughly as the safety needs’. Ultimately. or self-esteem.

simple and natural lives. little racial. people routinely – no matter what their income – name a figure which is around twice their current income. Non-Linear Systems. These included Thomas Jefferson. were creative. Harper & Row. Albert Einstein. Maslow found that they tended to share some of 12 characteristics: they perceived reality accurately. Eleanor Roosevelt. Motivation and Personality. Abraham. accepted themselves. This described Maslow’s ideas on ‘enlightened management’. the more you have yourself’. had a social interest. While working there he kept a diary which was published as Eupsychian Management (1965). they lived spontaneous. others and nature. liked privacy and detachment.
. Abraham Lincoln and. . because this is the path to success of any kind whatsoever. but it was undoubtedly a powerful argument for more inclusive and humane thinking to be applied in the workplace.Abraham Maslow
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salary they would be comfortable with. Maslow took his work further following his experiences in the summer of 1962 when he spent time with a Californian electronics company. Maslow went on to study selfactualization in greater depth. slightly less obviously. Maslow’s work can be regarded as utopian. had mystical or peak experiences. he said. ‘The more influence and power you give to someone else in the team situation. and were resistant to having ideas or cultures thrust upon them. 1954. After presenting his hierarchy of needs.’
Notes
1 Maslow. profound interpersonal relationships. religious or social prejudice. Maslow created the word ‘Eupsychian’ to describe ‘the culture that would be generated by 1. ‘It is well to treat working people as if they were type Theory Y human beings .000 self-actualizing people on some sheltered island where they would not be interfered with’. New York. . including financial success. didn’t take life for granted. they were problem-centered. He studied 48 people he considered to be selfactualized.

there’s not much you can do about it because the reasons for your failure are within yourselves.Konosuke Matsushita
“We are going to win and the industrial West is going to lose out.” Konosuke Matsushita Japanese industrialist 1894–1989
Breakthrough ideas
Customer service The entrepreneurial corporate giant
Key book
Not For Bread Alone
.

First. He had seven brothers and sisters. Matsushita later worked his way up to become an inspector in the Osaka Electric Light Company and. Matsushita Leadership). ten factories and 280 patents. Matsushita
. Matsushita began to make money. No-one bought them. He then developed an innovative bicycle light. He had suggested the idea to his previous employer but they had shown no interest – this was hardly surprising as Matsushita had little idea of how to actually make the product. His once relatively prosperous family lived in straitened circumstances after his father lost money betting on commodities. a year after Sony bought Columbia Pictures. in 1917. Matsushita’s success story contains a huge number of managerial lessons (analyzed in John Kotter’s 1997 book. Matsushita Electric. Matsushita was brought up in poverty in a small village near Wakayama. Panasonic. in 1990.The Ultimate Business Guru Book
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For Western managers one of the most chilling passages in management literature must be that when Konosuke Matsushita (1894–1989) mapped out why the West was destined to lose and the Japanese were inevitably going to emerge victorious in the battle for industrial supremacy. During World War II he made ships and planes as part of the Japanese war effort – even though he had no experience in either area. His story tells of one of the most impressive industrial achievements of the twentieth century. This simple product demonstration impressed and the business took off. Matsushita spoke from a position of remarkable strength. The order was delivered on time and was high quality. He left school in 1904 and was apprenticed to a maker of charcoal grills. This is a cruelly abbreviated version of how Matsushita created a $42 billion revenue business from nothing. Matsushita’s first break was an order to made insulator plates. Matsushita bought MCA. He also created one of the world’s most successful brands. founded his own company. and amassed a personal fortune of $3 billion. Again retailers were unimpressed. Then Matsushita had his salesmen leave a switched on light in each shop. Matsushita’s first product was a plug adapter. In 1958 Matsushita Electric was given an award for the quality of its factory operations and. By 1932 Matsushita had over 1000 employees. It took Matsushita and four others four months to figure out how to make the adapter.

This cemented loyalty. He took risks and backed his beliefs at every stage. Matsushita – who admired Henry Ford – emphasized efficient production and quality products. Finally. to relieve society as a whole from misery. If this happens. ask for their address and tell them that you will deliver the goods immediately.’ He also explained the role of the leader in more cryptic style –’The tail trails the head. ‘The mission of a manufacturer should be to overcome poverty. you should think of yourself as being completely in charge of and responsible for your own work. thereby enhancing the quality of life throughout the world’. ‘To be out of stock is due to carelessness.’ The third factor in Matsushita’s success was pure entrepreneurialism. yet
.’ he said. Sony developed Betamax which was immeasurably better and failed to license the technology. It is through such service that one gets permanent customers.Konosuke Matsushita
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understood customer service before anyone in the West had even thought about it. Ibis was manifested in his paternalistic employment practices. Matsushita developed VHS video and licensed the technology. coined in 1929. No matter what kind of job. Sell them goods that will benefit them. If the head is sluggish. Middle-level arrangements can be delegated. the tail will keep up the same pace. going on to describe how he approached his work –’Big things and little things are my job.’ Matsushita’s ‘basic management objective’.’ he said. And failure to make a profit was regarded by him as ‘a sort of crime against society. We take society’s capital. we take their people. and bring it wealth. Matsushita advocated business with a conscience.’ Matsushita mapped out the broader spiritual aims he believed a business should have. The world standard is VHS and Betamax is consigned to history. said: ‘Recognizing our responsibilities as industrialists. ‘Don’t sell customers goods that they are attracted to. the tail will droop. we will devote ourselves to the progress and development of society and the well-being of people through our business activities. ‘It’s not enough to work conscientiously. The classic example of this is the development of the video cassette.’ Second. we take their materials. During a recession early in its life the company did not make any people redundant. Profit was not enough. ‘After-sales service is more important than assistance before sales. If the head moves fast. apologize to the customers.

that their continued existence depends on the day-to-day mobilization of every ounce of intelligence.The Ultimate Business Guru Book
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without a good profit. competitive and fraught with danger. Berkeley Publishing.’ To Matsushita business was demanding. is now so complex and difficult. the survival of firms so hazardous in an environment increasingly unpredictable. serious and crucial: ‘Business.
. 1994. we are using precious resources that could be better used elsewhere.’
Bibliography
Not For Bread Alone. we know.

Elton Mayo
“So long as commerce specializes in business methods which take no account of human nature and social motives. so long may we expect strikes and sabotage to be the ordinary accompaniment of industry.” Elton Mayo Australian 1880–1949
Breakthrough ideas
Motivation and teamworking
Key book
The Human Problems of an Industrial Civilization
.

the morale of the guinea pigs improved. the so-called human instinct of association. Removed from their colleagues. for example. but in the statement they made – whatever the dictates of mass production and Scientific Management.’ commented Mayo. easily outweighs the merely individual interest and the logic of reasoning upon which so many spurious principles of management are based. Sociological factors were not expected to be of any significance. It was found. The experiments were carried out in the Relay Assembling Test Room of Western Electric’s Hawthorne Works. The research initially restricted itself to physical and technical variables. Mayo was not the only academic involved in the project. Five women workers were removed to a test room and observed as they worked.The Ultimate Business Guru Book
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The Australian Elton Mayo (1880–1949) had an interestingly diverse career though he remains best known – if known at all – for his contribution to the famous Hawthorne experiments into motivation. The Hawthorne Studies were carried out at Western Electric’s Chicago plant between 1927 and 1932. The studies offered important insights into the motivation of workers. and so responded positively. They felt chosen. The experiments were also written about by a variety of others including Harvard’s Fritz Roethlisberger and William Dickson. The Hawthorne experiments were celebrated as a major event. By virtue of their selection. The early part of his career was spent in a variety of places and
. and in their legacy – the Human Relations school of thinkers which emerged in the 1940s and 1950s. though these were clearly important. The researchers were interested in exploring the links between morale and output. ‘The desire to stand well with one’s fellows. that changes in working conditions led to increased output – even if the changes weren’t obviously for the betterment of working conditions. The results proved otherwise. The second important fact which emerged was that the feeling of belonging to a cohesive group led to an increase in productivity. the women felt that more attention was being paid to them. people and their motivation were critical to the success of any business. Their significance lay not so much in their results and discoveries. Mayo’s route to becoming involved in the Hawthorne experiments was circuitous.

worked in an Adelaide printing company and taught at Queensland University. so long may we expect strikes and sabotage to be the ordinary accompaniment of industry’.1 Mayo arrived in the United States in 1923 and worked at the University of Pennsylvania before joining Harvard. Mayo noted. spent time in Africa.Elton Mayo
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occupations. ‘So long as commerce specializes in business methods which take no account of human nature and social motives. The Hawthorne research revealed informal organizations between groups as a potentially powerful force which companies could utilize or ignore.
Management – art or science?
. It was at Harvard that Mayo cemented his long-term contribution to business thinking. Mayo’s belief that the humanity needed to be restored to the workplace struck a chord at a time when the dehumanizing side of mass production was beginning to be more fully appreciated. He underwent medical training in London and Edinburgh. He also worked on psychoanalysing sufferers of shell shock after World War I. He championed the case for teamworking and for improved communications between management and the workforce.

Tom Peters served in Vietnam.
. The yin and yang of thinking have rarely mixed. But the Hawthorne experiments look at human behavior from the wrong perspective.
Bibliography
Human Problems of an Industrial Civilization. Macmillan. Harvard University Press. This is not a true understanding. Michael Porter and contemporary gurus of reengineering). New York. Igor Ansoff. using consistently honored values to draw the separate individuals together. parent-to-child assumptions. Mayo’s work served as a foundation for all who followed on the humanist side of the divide. The humanists (from Mary Parker Follett. quoted in Richard Pascale’s Managing on the Edge. Alfred P Sloan.’ Even so. Mayo’s work and that of his fellow Hawthorne researchers. Social Problems of an Industrial Civilization. The Hawthorne experiments imply smug superiority. 1945.
Notes
1 War time has provided a range of influences on management thinkers: Frederick Herzberg was deeply affected by the Dachau concentration camp. The scientific bias of earlier researchers was put into a new perspective. Cambridge.The Ultimate Business Guru Book
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While Mayo offered a humanistic view of the workplace. MA. and Abraham Maslow to Charles Handy and Tom Peters) have shared little or no common ground with the scientists (Frederick Taylor. A Japanese manager. it was still one which assumed that the behavior of workers was dictated by the ‘logic of sentiment’ while that of the bosses was by the ‘logic of cost and efficiency’. Mayo. placing responsibility closest to where the knowledge resides. This is part of a cyclical pattern as management theorizing swings from science to humanity or art. Your thinking needs to build from the idea of empowering workers. made an important observation: ‘There is nothing wrong with the findings. Ed Schein studied the brainwashing of prisoners of war during the Korean War. Douglas McGregor. Alfred Chandler. 1933. redressed the balance in management theorizing.

Henry Mintzberg
“Management is a curious phenomenon.
Strategy as craft Roles of managers Management education
Key books
The Nature of Managerial Work The Rise and Fall of Strategic Planning
. enormously influential. and significantly devoid of common sense. It is generously paid.” Henry Mintzberg Canadian academic Born 1939
Breakthrough ideas.

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Henry Mintzberg (born 1939) is one of the most interesting of management thinkers. Mintzberg argues that management should be less ‘specialist-driven’.1 The resulting Master’s Program involves five business schools from around the world and is built around five mind-sets: the reflective mind-set. original and perplexing nature of reality is always there. While some researchers are carried away into the oblivion of academic jargon. He collects typographical errors and aphorisms and is cheerfully quotable – ‘Great organizations. Mintzberg is a great debunker of received wisdom. Among his latest adventures is a global management program which aims to be the next generation MBA. don’t need great leaders’. Eschewing the guru seminar trail. The traditional functional divides are dispensed with. ‘The idea that you can take smart but inexperienced 25 year-olds who have never managed anything or anybody and turn them into effective managers via two years of classroom training is ludicrous’. the worldly mind-set. the collaborative mind-set and the catalytic mind-set. Mintzberg continually injects an undercurrent of common sense and a willingness to be opinionated. Mintzberg is also an engineer and reality is never far away in his work. Mintzberg reserves his sternest criticism for the power of Wall Street and financiers over American business. he forges a unique intellectual path. ‘Delayering can be defined as the process by which people who barely know what’s going on get rid of those who do’. willing to gets their hands dirty. ‘These are the people most distant from the ones who make. Though it is characterized by studious academic research. the analytic mindset. ‘The trouble with most
. sell. Instead of running separate courses on marketing and finance the subjects are interwoven. Mintzberg is a long-term critic of MBA programs (despite teaching at McGill in Canada and INSEAD). he says going on to note that successes such as Jack Welch and Andy Grove are engineers by training. and service a product. The quirky. he says. Mintzberg never leaves reality far behind. regarding the role of managers as integration. but because they have the financial training they control a company’. once created. use.

From these observations. Not surprisingly. specific and non-routine • prefers verbal rather than written means of communication • acts within a web of internal and external contacts • is subject to heavy constraints but can exert some control over the work. not pretending to create them in the classroom. not the solution. Hot techniques dazzle us. Instead of spending time contemplating the long-term. Mintzberg identified the characteristics of the manager at work: • performs a great quantity of work at an unrelenting pace • undertakes activities marked by variety.Henry Mintzberg
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strategies are chief executives who believe themselves to be strategists. ‘It is time to close down conventional MBA programs. ‘Buzzwords are the problem. We have too few of either type’. He graduated in mechanical engineering from McGill University in 1961 and completed a general arts degree in the evenings. Mintzberg’s PhD thesis was titled ‘The manager at work – determining his activities. then fizzle’. Mintzberg identified the manager’s ‘work roles’ as:
.’ Mintzberg is Professor of Management at McGill University. The median time spent on any one issue was a mere nine minutes. Between 1961 and 1963. Great strategists are either creative or generous. Mintzberg worked in the operational research branch of Canadian Railways before going onto MIT’s Sloan School from where he has a PhD in management. France. Montreal and Professor of Organization at INSEAD in Fontainebleau. The Nature of Managerial Work. managers did not do what they liked to think they did. roles and programs by structured observation’. This involved Mintzberg – in true engineering fashion – examining how managers worked. moving from task to task with every move dogged by another diversion. We should be developing real managers. Mintzberg found that managers were slaves to the moment. another call. brevity and fragmentation • Has a preference for issues which are current. It formed the basis of his first book.

unifying effort • Liaiser: maintaining lateral contacts. While planning is concerned with analysis. Instead of accepting what he is told. Mintzberg has long been a critic of formulae and analysis-driven strategic planning. He defines planning as ‘a formalized system for codifying. he takes the mechanism apart to see how it works. in particular his ideas of ‘emergent strategy’ and ‘grass-roots strategy making’. strategy making is concerned with synthesis. the assumption that discontinuities can be predicated. has been highly influential. Today’s planners are not redundant but are only valuable as strategy finders. •
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Mintzberg’s approach to other areas he has researched has been similar. First.The Ultimate Business Guru Book Interpersonal roles • Figurehead: representing the organization/unit to outsiders • Leader: motivating subordinates. • Informational roles • Monitor: of information flows • Disseminator: of information to subordinates • Spokesman: transmission of information to outsiders. They are supporters of line managers. • Decisional roles • Entrepreneur: initiator and designer of change • Disturbance handler: handling non-routine events • Resource allocator: deciding who gets what and who will do what • Negotiator: negotiating. Their most effective role is in unearthing ‘fledgling strategies in unexpected pockets of the organization so that consideration can be given to (expanding) them’. forever questioning rather than providing automatic answers. Mintzberg’s work on strategy. Nowhere has he done this more successfully than in the field of strategy. strategy is either an ‘emergent’ pattern or a deliberate ‘perspective’. Mintzberg argues that strategy cannot be planned. elaborating and operationalizing the strategies which companies already have’. Mintzberg identifies three central pitfalls to today’s strategy planning practices. In contrast. Forecasting techniques are limited by the fact that they tend to assume that the future
. analysts and catalysts. In particular.

There is a ‘soft underbelly of hard data’. . that planners are detached from the reality of the organization. using intuition and using the grapevine – have all but been ignored. typified by the fallacy of ‘measuring what’s measurable’. Overly structured.’ he writes. markets. ‘the thought must be detached from the action.’ The third and final flaw identified by Mintzberg is the assumption that strategy making can be formalized. Confronted by a new world order. this creates a narrow range of options. Mintzberg points out that much of what is considered ‘hard’ data is often anything but. . The left side of the brain has dominated strategy formulation with its emphasis on logic and analysis. it is largely soft data that generate wisdom. Alternatives which do not fit into the pre-determined structure are ignored. which are generally measurable) over product-leadership strategies (emphasizing innovative design or high quality. To gain real and useful understanding of an organization’s competitive situation soft data needs to be dynamically integrated into the planning process. Soft data – networks of contacts. The results are limiting. The right side of the brain needs to become part of the process with its emphasis on intuition and creativity. subtle and at times subconscious of human cognitive and social processes’. writes Mintzberg. but they are indispensable for synthesis – the key to strategy making. Ibis gives artificial reassurance and creates strategies which are liable to disintegrate as they are overtaken by events. ‘Strategymaking is an immensely complex process involving the most sophisticated. He points out that our passion for planning mostly flourishes during stable times such as in the 1960s.Henry Mintzberg
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will resemble the past. They may be difficult to “analyze”. It is this disassociation of thinking from acting that lies close to the root of (strategic planning’s) problem. competitors. Mintzberg is critical of the ‘assumption of detachment’. talking with customers. ‘If the system does the thinking. strategy from operations (and) ostensible thinkers from doers . Second. ‘While hard data may inform the intellect. concludes
. planners are left seeking to re-create a long-forgotten past. suppliers and employees. which tends to be less measurable)’. ‘Planning by its very nature’. for example a pronounced tendency ‘to favor cost leadership strategies (emphasizing operating efficiencies.’ Planners have traditionally been obsessed with gathering hard data on their industry.

‘And for that there is no technique. Creativity. creates categories or rearranges established ones. ‘defines and preserves categories. This is why strategic planning can neither provide creativity. instinctive. It upsets stable patterns. Leader to Leader.The Ultimate Business Guru Book
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Mintzberg. and involves a variety of actors capable of experimenting and then integrating. ad hoc. Strategy-making. • Irregular. has the following characteristics: • Derived from synthesis. • Results from an approach which takes in broad perspectives and is therefore visionary. by its very nature. he says. • Done in time of instability characterized by discontinuous change. nor deal with it when it emerges by other means. • Informal and visionary.
. (They) can take root in all kinds of places’. • Relies on divergent thinking. By championing the role of creativity in strategy creation and in providing carefully researched rebuttals of formulaic approaches to management.’ Mold-breaking strategies ‘grow initially like weeds. intuition and using the subconscious. Henry. unexpected. ‘The new management mind-set’. opportunists. ‘The real challenge in crafting strategy lies in detecting their subtle discontinuities that may undermine a business in the future’. • Managers are adaptive information manipulators. rather than programmed and formalized. rather than aloof conductors. no program.’
Notes
1 Mintzberg. as presented by Mintzberg. just a sharp mind in touch with the situation. . Spring 1997. they are not cultivated like tomatoes in a hothouse . Mintzberg has provided new insights into strategy. This leads to outbursts of creativity as new discoveries are made. .

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Akito Morita
“American managers are too little concerned about their workers.” Akito Morita Japanese businessman Born 1921
Breakthrough ideas
Japanese management
Key book
Made in Japan
.

2 billion for its movie operations – the major misadventure in its history. And increasingly the world was Sony’s market. sold the first tape recorder in Japan. The company. Not a good name to put on a product.) Instead. in 1950. Its rice cooker was unreliable. he did not fit the Western stereotype. Sophisticated and entrepreneurial. In 1957 the company produced a pocket sized radio and a year later renamed itself Sony (sonus is Latin for sound). the modern Sony is a $37 billion company. (He also advocated a more assertive Japanese approach in The Japan That Can Say No which he wrote with a Japanese politician. Morita could have followed family tradition and gone into sake production.) In 1993 Morita resigned as Sony chairman after suffering a cerebral hemorrhage playing tennis. In 1961 Sony Corporation of American was the first Japanese company to be listed on Wall Street and. Initially. the company made radio parts and a rice cooker. Ishihara Shintaro. he founded a company with Masaru Ibuka (1908–97) immediately after the end of the war. In 1960 it produced the first transistor TV in the world. Morita later ruminated. the company wrote off $3.000 payroll than Japanese. Morita became famous as the acceptable face of Japanese industry. In the same year. was christened Tokyo Tsushin Kogyo KK (Tokyo Telecommunications Engineering Corporation). in 1989.The Ultimate Business Guru Book
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Akito Morita (born 1921) was the co-founder of Sony and the best known of the new wave of Japanese businessmen who rose to prominence in the West in the 1980s. Its combination of smaller and smaller products at the leading edge of technology proved irresistible. Akito Morita was an officer in the Japanese Navy during World War II. (He refers to himself as ‘the first son and fifteenth generation heir to one of Japan’s finest and oldest sake-brewing families’. among other things. In 1949 the company developed magnetic recording tape and. Sony bought Columbia Pictures so that by 1991 it had more foreigners on its 135. Trained as a physicist and scientist. Morita the salesman. Ibuka was the technical expert. Even so.
.

Its most famous success was the brainchild of Morita. ‘Never break another man’s rice bowl’. all the new ideas in the world will pass you by’. Morita noticed that young people liked listening to music wherever they went. Through progress. We proved it in Japan by changing the image of Made in Japan from something shoddy to something fine. which it failed to license. This is the vital force of Sony’ While companies such as Matsushita were inspired followers. we do’. ‘If you go through life convinced that your way is always best. The blemishes on its record were the Betamax video format. and color television systems. and always tries to bring out the best in a person. sometimes logic often has to take a backseat to understanding. says Morita who argues that analysis and education do not necessarily get you to the best business decisions. It shall be always a seeker of the unknown . Describing what he called Sony’s ‘pioneer spirit’. ‘I do not believe that any amount of market research could have told us that it would have been successful’. . Morita is also the author of Never Mind School Records. Morita and Sony’s gift was to invent new markets. the Walkman. The evolution of this now ubiquitous product is the stuff of corporate legend.Akito Morita
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Morita and Sony’s story parallels the rebirth of Japan as an industrial power. Surmounting that obstacle was a substantial business achievement. But if you work with people. he advises and observes: ‘Japanese people tend to be much better adjusted
.’ he says. Sony has a principle of respecting and encouraging one’s ability . Sony brought the world the hand–held video camera. Morita said: ‘Sony is a pioneer and never intends to follow others. innovation after innovation. Apart from his marketing prowess. He put two and two together and made a Walkman. he said adding the rider – ‘The public does not know what is possible. ‘You can be totally rational with a machine. the first home video recorder and the floppy disc. Sony set a cracking pace with product after product. Morita has emphasized the cultural differences in Japanese attitudes towards work. Such brilliant marketing was no mere accident. When Sony was first attempting to make inroads into Western markets it cannot be forgotten that Japanese products were sneered at as being of the lowest quality. .’ says Morita. . ‘We in the free world can do great things. . Sony wants to serve the whole world.

Management is regarded by Morita as where the buck stops and starts: ‘If we face a recession. New York. as honorable’. Reingold and Mitsuko Shimonura). Dutton. the company should sacrifice a profit. 1986.The Ultimate Business Guru Book
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to the notion of work.
. It’s management’s risk and management’s responsibility. why should they suffer?’
Bibliography
Made in Japan (with Edwin M. any kind of work. Employees are not guilty. we should not lay off employees.

” John Naisbitt American futurologist Born 1930
Breakthrough ideas
Restructurings
Key books
Megatrends
.John Naisbitt
“The most reliable way to anticipate the future is by understanding the present.

you can see the shifting patterns. He is a futurologist whose books have sold in their millions. Naisbitt identified ten ‘critical restructurings’. ‘This has become accepted and is now a hackneyed truism. Send a
. Naisbitt was educated at Cornell. You can’t stop technological progress. Naisbitt was ahead of the game. ‘This is a theme Naisbitt has returned to and developed in more recent years. remember that high-tech/high-touch isn’t an either/or decision. you can hardly go wrong with a high-touch response. matching each new technology with a compensatory human response. such as production methods. Kenneth Blanchard with The One Minute Manager and Tom Peters with In Search of Excellence. jet airplanes have resulted in more face-to-face meetings. Heart transplants have led to new interest in family doctors and neighborhood clinics. The book that really established Naisbitt as someone worth listening to was the 1982 publication of Megatrends. and has been a distinguished international fellow at the Institute of Strategic and International Studies in Kuala Lumpar. Indeed.’ he says.The Ultimate Business Guru Book
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John Naisbitt (born 1930) worked as an executive with IBM and Eastman Kodak. High touch is about getting back to a human scale. Give out your home phone number. . The technological possibilities in information exchange and transfer were contemplated by a small group in West coast laboratories. While some have proved accurate predictions of what has happened in intervening years. If you keep track of local events. still held sway. at one time Cornell could boast the top three authors in the bestseller lists as alumni – Naisbitt with his Megatrends. • ‘We are moving in the dual directions of high tech/high touch. . we have in fact changed to an economy based on the creation and distribution of information. ‘All change is local and bottom-up . traditional issues. In the early 1980s. In Megatrends. however. It has sold over eight million copies and Naisbitt has also produced Megatrends Asia. Also. but by the same token. others have proved less accurate: • ‘Although we continue to think we live in an industrial society. ‘The acceleration of technological progress has created an urgent need for a counter ballast – for high touch experiences.

’ This has become one of the great trends of the last decade as networks are developed in a bewildering variety of ways – with suppliers. ‘In cities and states. some 16 years on. suggest that this is becoming the case for a select few professionals with marketable skills. though there are few signs of reform. ‘We are shifting from institutional help to more self-reliance in all aspects of our lives. but its success is built on a form of high touch: hand delivery.’ Trends in working patterns. which he believes is that ‘The bigger the world economy.’ ‘No longer do we have the luxury of operating within an isolated. we must now acknowledge that we are part of a global economy.
. This will be especially important to the business community.’ Alvin Toffler was suggesting this in his 1970 book Future Shock. FedEx has all the reliability and efficiency of modern electronics. ‘We are restructuring from a society run by short-term considerations and rewards in favor of dealing with things in much longer-term time frames. that this trend has become a reality. We have begun to let go of the idea that the US is and must remain the world’s industrial leader as we move on to other tasks. the more powerful its smallest player’. ‘Naisbitt was right to identify the emergence of globalization as a powerful force. Naisbitt has gone onto explore what he calls the ‘global paradox’. ‘There is little evidence. in small organizations and subdivisions. we have rediscovered the ability to act innovatively and to achieve results – from the bottom up. such as employability. national economic system. globally. Technology has enabled networks never previously anticipated – with important repercussions. internally. ‘We are giving up our dependence on hierarchical structures in favor of informal networks. selfsufficient.John Naisbitt
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•
•
•
•
•
•
hand-written letter. His perception of a change in America’s perception of itself is open to doubt. between competitors. ‘We are discovering that the framework of representative democracy has become obsolete in an era of instantaneously shared information.’ Naisbitt anticipated the fashion in the late eighties and early nineties for empowerment with responsibility being spread more evenly throughout organizations rather than centered on a coterie of managers.

can beat big bureaucratic companies ten out of ten times. everyone else hears about it. But we still have the same old system. Global Paradox. So . he says in The Global Paradox. It’s the small companies who are creating the global company. Rethinking the Future. they will just continue to go out of business. Naisbitt has championed the role of small business in generating the wealth of the future. 1996. but in the 1980s it was less so.1 Linked to this is the entire question of speed which Naisbitt identified early on as a competitive weapon –’Economies of scale are giving way to economies of scope. speed’. Instantly. this is stating the obvious. and above all. London..The Ultimate Business Guru Book
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•
•
‘When everyone hears about everything at the same time.
Bibliography
Megatrends.’ says Naisbitt. New York. Unless big companies reconstitute themselves as a collection of small companies.
Aside from these trends. Warner Books. . 1984. ‘Small companies. Gibson. 1994.’ he says. ‘More Americans are living in the South and West leaving behind the old industrial cities of the North. ‘From a narrow either/or society with a limited range of personal choices. Rowan (editor). right down to the individual. .2
Notes
1 2 Interview with John Naisbitt. finding the right size for synergy.’ In the era of Silicon Valley et al. William Morrow & Co. Nicholas Brealey. we’re going through a big period of correction. market flexibility. and we all know that. Naisbitt could have added the caveat that this society would offer multiple options but only for a few.
.’ To this. we are exploding into a free-wheeling multiple option society. Star Tribune. November 1996.

one first seeks a clear understanding of the particular character of each element of a situation and then makes the fullest possible use of human brain power to restructure the elements in the most advantageous way.” Kenichi Ohmae Japanese consultant and author Born 1943
Breakthrough ideas
Strategy and key factors for success Japanese business thinking Impact of globalization on nations
Key books
The Mind of the Strategist The Borderless World
.Kenichi Ohmae
“In strategic thinking.

Indeed. help corporations provide stable and rewarding jobs anywhere in the world regardless of the corporation’s national identity. Ohmae joined McKinsey in 1972. Second.The Ultimate Business Guru Book
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When Kenichi Ohmae (born 1943) left the consulting firm McKinsey to stand for the governorship of Tokyo in 1995. and avoid abrupt changes in economic and social fundamentals. First. the Tokyo Institute of Technology. McKinsey Americanized him as ‘Ken’ but the ambitions of his thinking remained resolutely global. Ohmae is a graduate of Waseda University. Ohmae’s work is important for two reasons. He demonstrated that the Japanese were human after all – at the time. . Western managers were beginning to wonder. a musician and a motorcyclist’. It was immodestly noted below that ‘this statement . . While the significance of the latter accomplishment is difficult to determine. becoming managing director of its Tokyo office. Even among the brilliant minds of McKinsey he stood out. coordinate activities with other governments to minimize conflicts arising from narrow interests. an incredibly prolific writer. It is reputed that Ohmae’s comment on his departure was that it was simply a question of changing clients to all of Japan. Modesty would ill suit Ohmae’s qualifications and credentials. is one we each embrace and believe to be the best possible course for all countries and governments to follow’. W the firm’s departure announcement noted Ohmae was ‘a great consultant.’ It called on governments to ‘deal collectively with traditionally parochial affairs’ including taxation. He is also a talented flautist and some time advisor to the former Japanese Prime Minster Nakasone. he revealed the truth behind Japanese strategy-making to an expectant Western audience. and has a PhD in nuclear engineering from Massachusetts Institute of Technology. Away from such bold pronouncements. Ohmae has explored
. there is no doubting Ohmae’s credentials as a modern Renassiance man. the trio contended that the role of central governments must change to ‘allow individuals access to the best and cheapest goods and services from anywhere in the world. In the declaration. a compelling speaker. Ohmae’s book The Borderless World concluded with a ‘Declaration of Interdependence toward the world’ signed by Ohmae and McKinsey’s Fred Gluck and Herbert HenzIer.

become an asset. the flexible Japanese organization has now. Ohmae also noted that the customer was at the heart of the Japanese approach to strategy and key to corporate values. Japanese businesses tend not to have large strategic planning staffs. quoted Ohmae in In Search of Excellence: ‘Most Japanese companies don’t even have a reasonable organization chart. Most notably there was the Japanese art of strategic thinking. collectively.’
. Peters and Waterman. there was more to Japanese management than that. the “strategic triangle”. the customer. Instead they often have a single. Ohmae pointed out that unlike large US corporations. when In Search of Excellence was published. We shall call them. requiring multiple disciplines. Innovation typically occurs at the interface. three main players must be taken into account: the corporation itself. ‘Seen in the context of the strategic triangle. . ‘In the construction of any business strategy. especially. Each of these “strategic three Cs” is a living entity with its own interests and objectives. the job of the strategist is to achieve superior performance. Nobody knows how Honda is organized. Positive matching of the needs and objectives of the two parties involved is required for a lasting good relationship. At the same time. Ohmae’s The Mind of the Strategist also reached America – though it had been published in Japan in 1975. Forget company songs and lifetime employment.’ he said. except that it uses lots of project teams and is quite flexible . naturally talented strategist with ‘an idiosyncratic mode of thinking in which company. relative to competition. the strategist must be sure that his strategy properly matches the strengths of the corporation with the needs of a clearly defined market. and the competition. is ‘basically creative and intuitive and rational ‘– though none of these characteristics were evident in the usual Western stereotype of Japanese management. the corporation’s long–term viability may be at stake. said Ohmae. customers. This.Kenichi Ohmae
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the ramifications of globalization more extensively than virtually any other thinker. without it.’1 In 1982. and competition merge in a dynamic interaction out of which a comprehensive set of objectives and plans for action eventually crystallizes’. . Ohmae’s first contribution was to explode simplistic Western myths about Japanese management. Thus. McKinsey colleagues. in the key factors for success of the business.

This.The Ultimate Business Guru Book
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The central thrust of Ohmae’s arguments was that strategy as epitomized by the Japanese approach is irrational and non-linear. Japan and the Pacific. This can be achieved in four ways: by focusing on the key factors for success (KFSs). reaching conclusions without any real breakdown or analysis. by building on relative superiority. (Previously. and the final route to an effective strategy is through utilizing strategic degrees of freedom.’ Ohmae wrote. Ohmae has since gone on to explore the role of nations still further and now suggests that we have reached a time when ‘the end of the nation state’ is imminent. In Triad Power (1985).’ Ohmae went on to suggest that an effective business strategy ‘is one. By this. by which a company can gain significant ground on its competitors at an acceptable cost to itself’.) ‘Phenomena and events in the real world do not always fit a linear model. companies must utilize the three Cs of commitment. also applies to industrial consumers. countries are mere governmental creations. he argues. In the Interlinked Economy (also made up of the Triad) consumers are not driven to purchase things through nationalistic sentiments – no matter what politicians suggest or say. True strategic thinking thus contrasts sharply with the conventional mechanical systems approach based on linear thinking. through pursuing aggressive initiatives. To Ohmae. he suggested that the route to global competitiveness is to establish a presence in each area of the Triad (United States. Also.
. you don’t care about country of origin or country of residence. Europe). creativity and competitiveness. Ohmae means that the company can focus upon innovation in areas which are ‘untouched by competitors’. You don’t think about employment figures or trade deficits. the Japanese had been feted in the West for the brilliance of their rationality and the far-sighted remorselessness of their thinking. But it also contrasts with the approach that stakes everything on intuition. Hence the most reliable means of dissecting a situation into its constituent parts and reassembling them in the desired pattern is not a stepby-step methodology such as systems analysis. the human brain. it is that ultimate non-linear thinking tool. The second area which Ohmae has greatly influenced is that of globalization. ‘At the cash register. Rather.

’ Ohmae concludes. rather than simply direct the work of others. political and social impact of the global economy. And we have to create meaning and uphold values in flatter. We will. risk taking and organizational strategy. we as leaders have to understand what’s happening in the rest of the world. in the most cost-effective and sustainable way. Though Ohmae adds that small companies can still succeed by imaginatively nipping at the heels of their larger competitors.’ Ohmae writes. The second factor is the much reported growth in new media and information technology. Wales. To meet these challenges. we need to begin thinking in terms of regions. policies and relationships among business. First. individuals and communities’. Ohmae suggests that corporate leaders should concentrate on building networks.’2 Ohmae believes that the global economy is the result of a number of forces. ‘The essence of business strategy is offering better value to customers than the competition. The obvious corollary of this is that there are huge economies of scale to be made. it seems. Instead of talking about countries as economic units. There is more to technology than sitting in the same place doing the same things quicker. there are booming regional economies. more disciplined enterprises. consumer cultures. sort and synthesise information. and reshape our organization to respond accordingly. Global standards ‘lay the groundwork for enormous generation of wealth’. the question is whether to invest in Catalonia. Ohmae points out that full utilization of technology requires ‘new laws. have to forget the past in order to create the future.
. Technology and the global dominance of certain products mean that we are all Californians now. To Ohmae. No leader can hope to guide an enterprise into the future without understanding the commercial. ‘But today. ‘We have to learn to share. government. thousands of competitors from every corner of the world are able to serve customers well. We have to rethink our basic approach to decision making. the UK or France. The third factor is the rise of universal.Kenichi Ohmae
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Globalization and strategy continue to be at the heart of Ohmae’s recent work. To develop effective strategy. Alsace-Lorraine rather than Spain.

The Evolving Global Economy (editor) Harvard Business School Press. MA.The Ultimate Business Guru Book
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Notes
1 2 Peters. London. Ohmae. In Search of Excellence.
. Boston. Robert. New York. and Waterman. Harper & Row. McGraw Hill. 1982. Winter 1998. Kenichi. 1982. ‘Strategy in a world without borders’. New York. 1990.
Bibliography
The Mind of the Strategist. 1995. The End of the Nation State. HarperCollins. London. 1985. Free Press. The Borderless World. 1995. Leader to Leader. New York. William Collins. Tom. Triad Power: The Coming Shape of Global Competition.

David Packard
“You shouldn’t gloat about anything you’ve done. you ought to keep going and try to find something better to do.” David Packard American executive 1912–96
Breakthrough ideas
MBWA Employee involvement
Key book
The HP Way
.

We just took on odd jobs. By 1948. Bill Hewlett and David Packard created one of the most successful corporations in the world.1 million. ‘Professors of management are devastated when I say we were successful because we had no plans.’ said Packard. In their first year of business Hewlett and Packard achieved sales of $5100 with $1300 in profits. An automatic lettuce thinner and a shock machine to help people lose weight followed. That’s all we thought about in the beginning.’ The garage was the birthplace of Silicon Valley.The Ultimate Business Guru Book
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When they were assembling their list of ‘excellent’ companies in the late 1970s. Hewlett and Packard hired technical talent. During wartime the business flourished. there was no doubt that Hewlett-Packard was worthy of inclusion. The duo left the garage for good in 1940. said Hewlett and Packard. Immediately after the war.’ said Hewlett. But their legacy is not the efficiency of their lettuce thinner or the quality of their urinal flusher. their celebration of long-lived companies. Their ambitions were typical of many young people starting a business. Their secret. the company’s sales were $2. David Packard (1912–96) was one half of the partnership which created one of the business and management benchmarks of the century. lay in the simplicity of their methods. employing 144 people at its height. It was one of their least controversial choices.
. bowling alley sensors and air conditioning equipment. when Jerry Porras and James Collins wrote Built to Last. it lies in the culture of the company they created and the management style they used to run it. Similarly. In 1937. Hewlett-Packard’s first success was a device for measuring sound waves which they sold to Walt Disney. The company is ranked similarly in virtually every other poll on well-managed companies or ones which would be good to work for. with a mere $538 and a rented garage in Palo Alto. the H-P way. sales fell off – by half in 1946 alone. The two had met while students at nearby Stanford. They also pondered on the market opportunities for automatic urinal flushers. ‘We hadn’t the slightest idea of building a big company. Hewlett-Packard has pulled off an unusual double: it is admired and successful. Tom Peters and Robert Waterman included Hewlett-Packard. ‘We thought we would have a job for ourselves. In 1985. The business revived. Fortune ranked Hewlett-Packard as one of the two most highly admired companies in America. Undaunted.

Hewlett-Packard worked to a few fundamental principles. ‘If I hear anybody talking about how big their share of the market is or what they’re trying to do to increase their share of the market. develop and manufacture the finest [electronic equipment] for the advancement of science and the welfare of humanity.’ noted Louise Kehoe of the Financial Times in Packard’s obituary. The company believed that people could be trusted and should always be treated with respect and dignity. If there was conflict.David Packard
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From the very start. While all about were turning into conglomerates. It did not believe in long-term borrowing to secure the expansion of the business.) They didn’t bet the company on a big deal or get into debt.’ Packard said in a 1974 speech. the company was an early entrant into the market. in his research Richard Pascale identified ‘terminal niceness’ as a potential problem for the company.1 Hewlett-Packard was a company built on very simple ideas. and the achievement that Packard was most proud of.’ said Packard in a 1961 memo to employees. I’m going to personally see that a black mark gets put in their personnel folder. Being criticized for being too good could only happen in the business world. in the end. They didn’t do anything too risky or too outlandish. ‘Our main task is to design.’ said Packard. It got on with the job. H-P believed that management should be available and involved – Managing By Wandering About was the motto. Packard preferred to talk of leadership. The duo eschewed fashionable management theory. They kept it simple. Nice guys built a nice company. (Packard was skeptical about pocket calculators though. They just need guidelines on how to do it. When their divisions grew too big – and by that they meant around 1500 people – they split them up to ensure that they didn’t spiral out of control. is a management style based on openness and respect for the individual. Hewlett and Packard kept their heads down and continued with their methods. ‘We both felt fundamentally that people want to do a good job. Indeed. rather than the administrative suggestions of management. We intend to devote ourselves to that task. Its recipe for growth was simply that its products needed to be leaders in their markets. it had to be tackled through communication and consensus rather than confrontation. For
. Indeed. ‘Their legacy.

Indeed. Packard also gave $40 million to found the Monterey Bay Aquarium. During the 1970s recession. ‘The most extraordinary trait at Hewlett-Packard is uniformity of commitment. Financial Times. Wherever you go in the HP empire. Louise. New York. the company had 100. their values worked to save the company when times were hard.
Notes
1 Kehoe.
. David Packard was also involved in politics.
Bibliography
The HP Way. HarperBusiness. he supported George Bush against Bill Clinton and warned of being ‘caught in the updraft of Bill Clinton’s hot air balloon’.The Ultimate Business Guru Book
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living up to their simple standards. They gave donations of over . Hewlett-Packard staff took a 10 percent pay cut and worked 10 percent less hours. Both Packard and Hewlett felt that Stanford engineering professor Frederick Terman had launched their careers. ‘Radical who built group with open management style’. HP people at all levels show boundless energy and enthusiasm. A devout Republican to the end.’ observed Peters and Waterman in In Search of Excellence. He was deputy defense secretary in the Nixon administration (1969–71) and also worked on a variety of government commissions. Commitment to people. feeling proud of their division’s achievements in that area. Packard retired as chairman in 1993. If the company hadn’t had a long-term commitment to employee stock ownership perhaps they wouldn’t have been so keen to make sacrifices. On his death in 1996.300 million to Stanford. you find people talking product quality. It is estimated that his private family foundation has given $480 million to good causes.000 employees in 120 countries with revenues of $31 billion. the consistency of approach and attitude. 28 March 1996. 1995. clearly fostered commitment to the company. Hewlett-Packard deserve acknowledgment.

That mindset needs to be challenged.” Richard Pascale American consultant and academic Born 1938
Breakthrough ideas
Seven S framework Japanese management Corporate transformation
Key books
The Art of Japanese Management Managing on the Edge
.Richard Pascale
“Managerial behavior is predicated on the assumption that we should rationally order the behavior of those we manage.

argued vigorously for replacing sequencing with staff. ‘Athos said he had given it some thought and said there was a guy at Harvard. skills. ‘Since everyone was having trouble with sequencing it was easy to drop. Athos insisted on superordinate goals and I contributed style. So why didn’t we start with strategy on Monday then move on to structure on Tuesday and systems on Wednesday. then of Harvard Business School. ‘And since Peters was proposing that people and power needed somehow to be included (Athos was adding aggregates of people at Harvard). the final Seven S Framework came into being. systems and style) are a kind of aide memoire. Chuck Gibson. Otherwise we wouldn’t survive the five days. structure and systems. He had developed these three Ss for Harvard’s PMD Program of which he and Tony were in charge. and the McKinsey consultants.
. it was also possible to agree that staff was an addition which resolved various concerns. structure. such a scatter shot. Thus. Initially a meeting was arranged between the quartet. The framework emerged from a series of meetings during June 1978 between Pascale.’ Pascale recalls. Athos and Pascale proposed calling it ‘sequencing’. Peters and Pascale then suggested another variable was needed. who had a scheme – strategy. So we walked in with five of the Seven Ss. one of the most renowned and debated management tools of the 1980s.’1 Athos and Pascale persuaded Waterman and Peters to use alliteration. Tom Peters and Robert Waterman who were already involved in the research which was to form the basis of In Search of Excellence. ‘Athos said we needed an agenda for the five days otherwise we’d be driven round the bend by Peters – he’s so energetic. a useful memory jogger of what concerns organizations. I was working on The Art of Japanese Management [published in 1981] so was interested in the idea of shared values. staff. one concerned with timing and implementation. Athos said he had a couple of his own to add – superordinate goals and shared values.’ say Athos and Pascale.’ The Seven Ss (strategy. shared values. The evolution of the Seven S framework provides an insight into the haphazard means by which many influential ideas see the light of day. Anthony Athos.The Ultimate Business Guru Book
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Richard Pascale (born 1938) first came to the attention of a large audience with the advent of the Seven S framework. Julian Phillips of McKinsey who also joined the group.

Pascale was a member of the faculty at Stanford’s Graduate School of Business. it was unremarkable. His research eventually covered 34 companies over six years The second area of Pascale’s work which gained popular attention was that of vision. The value of a framework such as the Seven Ss is that it imposes an interesting discipline on the researcher. He has also been a White House Fellow. Pascale initially thought that lessons from Japan were limited for cultural reasons. This was identified by he and Athos as one of the key components of
. In addition to the Seven S framework. Special Assistant to the Secretary of Labor and Senior Staff of a White House Task Force reorganizing the President’s executive office. There could be six or eight Ss. He is also the author of Managing on the Edge (1990). He taught there for 20 years and his course on organizational survival was reputed to be the most popular on the Stanford MBA program. skills and staff. which was one of the first business bestsellers. the West remained preoccupied with the hard Ss of strategy. he was among the first researchers to provide original insights into Japanese approaches to business and management. shared values. Pascale later noted in Managing on the Edge. At the time of the development of the Seven S framework. (Tom Peters himself initially thought it ‘corny’ – though Peters and Waterman used it a year later in In Search of Excellence – published a year after The Art of Japanese Management. as a generic statement of the issues facing organizations. structure and systems. First. Pascale has since worked as an independent consultant. Pascale’s work is significant for a number of reasons.Richard Pascale
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The Seven S Framework gained a great deal of attention though. He then decided more fertile ground lay in looking at Japanese companies in the US. Working for the US’s National Commission on Productivity. These conclusions formed the bedrock of The Art of Japanese Management (1981). Pascale and Athos concluded that the Japanese succeeded largely because of the attention they gave to the soft Ss – style.) ‘The framework is nothing more than seven important categories that managers pay attention to’. ‘There is nothing sacred about the number seven. In contrast.’ From Pascale’s perspective the Seven Ss presented a way into comparisons between US and Japanese management.

says Pascale.The Ultimate Business Guru Book
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Japanese management. ‘The incremental approach to change is effective when what you want is more of what you’ve already got. Their championing of vision proved highly influential. Change. Pascale contends that four factors ‘drive stagnation and renewal in organizations’: 1.’
. vivifying modus operandi rather than pallid or generic statements of corporate intent. that has been sufficient because our advantages of plentiful resources. pausing only to point out that from the Fortune 500 of 1985 143 had departed five years later.
4. The third element of Pascale’s work are the related areas of corporate mortality and corporate transformation. geographical isolation. 2.
3. Managing on the Edge begins with the line ‘Nothing fails like success’. In the late 1980s and 1990s. Since then there have been various studies of corporate longevity – most notably Arie de Geus’ The Living Company (1997). Pascale has drawn attention to the fragile foundations on which our grand corporate assumptions are made. Today. is a fact of business life. Fit – pertains to an organization’s internal consistency (unity) Split – describes a variety of techniques for breaking a bigger organization into smaller units and providing them with a stronger sense of ownership and identity (plurality) Contend – refers to a management process that harnesses (rather than suppresses) the contradictions that are inevitable by–products of organizations (duality) Transcend – alerts us to the higher order of complexity that successfully managing the renewal process entails (vitality). and absence of serious global competition defined a league in which we competed with ourselves and everyone played by the same rules. The trouble is we are ill-equipped to deal with it and our traditional approach to managing change is no longer applicable. ‘Great strengths are inevitably the root of weakness.
To overcome such inertia and survive in a turbulent climate requires a constant commitment to what Pascale labels ‘corporate transformation’.’ argued Pascale. Historically. corporate visions are a fact of life though many fail to match the Japanese practice mapped out by Pascale and Athos in which visions are dynamic.

the use of highly trained facilitators.’ he says.3 The Center puts units of 3000–4000 people through a gruelling 14-day programme involving 600 instructors.000 acres and a million dollars a day’. the immersion of the teams in the tasks they encounter. their central limitation is that they are driven by and involve so few people. (There is only one drawback in converting the Army’s methods into the corporate world: cost – ‘all it takes is 650. says Pascale: only immersion in an environment of learning. the collection of hard data to avoid subjectivity and needless debate. In the latter element. Incorporating employees fully into the principal business challenges facing the company is the first ‘intervention’ required if companies are to thrive. Finally. 18-hour days. The second is to lead the organization in a way which sharpens and maintains incorporation and ‘constructive stress’. Pascale has examined the work of the Army’s National Training Center in California. The lessons for industry are important. Instead its onus is on how much each person can learn. . The problem with programmes of change does not usually lie with the programmes themselves. constant questioning and openness can create a culture geared to transformation. Pascale cites the work of the United States Army – in which a strong culture allows minds and behavior to be changed through rigorous and carefully thought through training.Richard Pascale
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True transformation requires the involvement and commitment of all in the organization. the Center does not evaluate performance. cultivating relentless discomfort with the status quo .)
. Interestingly. . Pascale advocates instilling mental disciplines that will make people behave differently and then help them sustain their new behaviour. ‘The Army’s success stems from: every one of its soldiers having a shared and intricate understanding of what drives ‘business results’. and establishing a standard of uncompromising straight talk that evokes cross-hierarchical feedback and introspection. says Pascale. Instead. Pascale believes that what makes this intense training effective is its concentration on identifying the key tasks that drive success. simulated battles and ‘After Action Reviews’ where.2 In particular. and a fundamental belief in not criticizing people. ‘hardship and insight meet’.

Harvard Business Review. Case studies of this in practice are few and far between. Pascale’s vision of the future is a troubling one. 1981.
Notes
1 2 3 4 Interview with the author. using the agility engendered by their individuals and culture to ask questions.
Bibliography
The Art of Japanese Management (with Anthony Athos). Managing on the Edge. March/April 1997. 1990. under normal circumstances. Godfrey. Millemann. tend to coagulate and the organization eventually stagnates. London. Penguin. Human Resources. contention (is conflict brought out into the open and used as a learning tool). Linda. and Gioja. Viking. 23 July 1996. ‘Changing the way we change’. identity (to what extent do individuals identify with the organization as a whole. London. Mark. To survive companies must continually move on. These are power (do employees think they can have any influence on the course of events?). Pascale and his co-researchers believe that there are ‘four indicators that tell us a great deal about how an organization is likely to perform and adapt’. November/December 1997.
. Human Resources. Pascale has coined the term agility to describe the combination of skills and thinking required of the organizations of the future. ‘The next big idea’. rather than with a narrow group). discuss the undiscussable and shake things up. Richard.4 The trouble is that these four elements. Pascale. Pascale says that this can only be avoided if an organization pursues seven disciplines of agility – which range from the self-explanatory ‘accountability in action’ to the more elusive and painful ‘course of relentless discomfort’. and learning (how does the organization deal with new ideas?). Richard. Pascale.The Ultimate Business Guru Book
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In his recent work. November/December 1996. ‘Manoeuvres for the millennium’. Golzen.

each person rises to the level of his own incompetency.” Laurence Peter Canadian author and educator 1919–90
Breakthrough ideas
Career mismanagement
Key book
The Peter Principle
.Laurence J. Peter
“In an organization.

He pointed out. Parkinson’s Law took the logic of mass production and applied it to administration. for example.’ The theory was not simply an exercise in superficial cynicism. There were no rules – it depended on the person doing the job and their unique situation. anxiety and toil. wrote Parkinson. another in hunting for spectacles. Even if growth in numbers doesn’t make them more money. Parkinson wryly and accurately debunked the notion of a particular task having an optimum time for completion. ‘An hour will be spent in finding the postcard. an hour and a quarter in composition. Parkinson’s Law was simply that work expands to fill the time available for its completion.The Ultimate Business Guru Book
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There is precious little to laugh about in the work and thoughts of management thinkers. ‘An elderly lady of leisure can spend an entire day in writing and dispatching a postcard to her niece at Bognor Regis’. The total effort which would occupy a busy man for three minutes all told. There are perhaps three key mileposts of business humor which have mirrored changes in corporate life. The first was Parkinson’s Law. The few exceptions therefore stand out as eccentric beacons of hope. Parkinson observed that Can official wants to multiply subordinates. It owed its inspiration to tortuous administration and the pointless shuffling of paper. You can measure and prescribe all you like but it is doomed to failure. This was a brilliantly comic exposé of bureaucracy by the British academic C. that the number of admiralty officials in the British Navy increased by 78 percent between 1914 and 1928 while the number of ships fell by 67 percent and the number of officers and men by 31 percent. Parkinson backed it up with statistics. leave another person prostrate after a day of doubt.
. As a result. Northcote Parkinson (see Appendix). not rivals’ and ‘officials make work for each other’. companies grow without thinking of how much they are producing. Parkinson concluded that the expansion of administrators tends to take on a life of its own –‘The Officials would have multiplied at the same rate had there been no actual seamen at all’. half-an-hour in a search for the address. and twenty minutes in deciding whether or not to take an umbrella when going to the pillar-box in the next street. may. companies grow and people become busier and busier. in this fashion.

Peter wove a mass of aphorisms and bon mots. you will probably end up somewhere else’. for me. and those who did and never thought’. Peter’s book. he observed incompetence everywhere he looked. or ‘If you don’t know where you are going. the next comic master targeted the absurdities of the corporation and management hierarchies. Peter simply reminded us of this. These included: ‘An economist is an expert who will know tomorrow why the things he predicted yesterday didn’t happen’. through being promoted until they failed to do well in their current job. the incompetent workers
. for you. you may be at your level of incompetence’. but misfortune has much more patience’.Laurence J. going on to advise that the final promotion should not be taken as inevitable – ‘If at first you don’t succeed. The Peter Principle (co-authored with Raymond Hull) also features an essential glossary which includes ‘tabulatory giantism: obsession with large size desks’ and ‘free-floating apex: a supervisor with no subordinates’. Peter’s work was an antidote to the many hundreds of books which celebrate corporate success stories. We all know that farce and failure dog our lives. Peter
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While Parkinson aimed his jibes at bureaucracy. ‘For each individual. apparently. The final comic perspective comes from Scott Adams (born 1957) and his Dilbert cartoon. ‘Now. Peter (1919–90) was a Canadian academic. Ibis is now the biggest selling business book of all time. Under ‘exceptions’ the entry is forthright: ‘There are no exceptions to the Peter Principle’. The result was the Peter Principle which said that managers in an organization rise to their level of incompetence. wrote Peter. and ‘Originality is the fine art of remembering what you hear but forgetting where you heard it’. Adams takes the Peter Principle a stage further. ‘Fortune knocks once. ‘There are two sorts of losers – the good loser. the final promotion is from a level of competence to a level of incompetence’. Being a man of the world in possession of sight and the normal faculties. Around his basic joke. and the other one who can’t act’. Laurence J. The greatness of Peter lay in the fact that his humor is grounded very solidly in corporate reality Anyone who has ever worked for an organization can identify with his observations – ‘There are two kinds of failures: those who thought and never did.

‘When I entered the workforce in 1979. But that skill is becoming less important every year.
. Now I think we’d all like to return to those Golden Years when you had a boss who was once good at something. incompetence and fear of being caught failing or being incompetent. Journal..The Ultimate Business Guru Book
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are promoted directly to management without ever passing through the temporary competence stage’. reflects Adams. William Morrow & Co.. ‘Now all that matters is if you can install your own Ethernet card without having to call tech support and confess your inadequacies to a stranger whose best career option is to work in tech support. Bantam Books. 1984. Scott. Peter’s Quotations: Ideas For Our Time.
Bibliography
The Peter Principle (with Raymond Hull).’1 Adams’ themes are much the same as Peter’s and Parkinson’s: failure. 1969. The Peter Plan. ‘The Dilbert principle’.’
Notes
1 Adams. William Morrow & Co.’ says Adams. 1981. ‘In the old days it was important to be able to run down an antelope and kill it with a single blow to the forehead. 22 May 1995. New York. Quill. Why Things Go Wrong or the Peter Principle Revisited. 1993. Wall Street. the Peter Principle described management pretty well. New York.

Peters was highprofile and media friendly. What he
. He was. Tom Peters was both a beneficiary and the instigator of the boom in business books and the rise of the guru business. quote after quote. It marked a watershed in business book publishing. The standard. the message has been radically overhauled. he traveled the world with bewildering speed. Waterman’s In Search of Excellence was published. Tom Peters’ ideas have been refined. First there were the books. charging celebrity rates (around $90. he has done so in a superficial way. After Stanford he joined the consultancy firm. then the videos. Thomas J. delivering seminar after seminar. the business book market has exploded into a multi-million pound global extravaganza. Peters and Robert H. Peters. While his predecessors were doughty. entirely changed. the consultancy and the conferences. low-profile academics. The medium threatened to engulf the message. over the years. Peters’ critics suggest that while he may have raised awareness. After In Search of Excellence stormed unexpectedly up the bestseller lists. criticism of Peters is that there is little consistency in his thinking. And. He also worked for the drug enforcement agency in Washington. A business sprung up around him. Though his messages are often hard hitting they are overly adorned with empty phrase making – ‘yesterday’s behemoths are out of step with tomorrow’s madcap marketplace’.The Ultimate Business Guru Book
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In 1982 Thomas J. McKinsey & Company. Since 1982. He left the firm (prior to the publication of In Search of Excellence) to work independently. He studied engineering at Cornell University and served in Vietnam. in parallel.and with insufficient attention to the details of implementation. Peters has an MBA and PhD from Stanford where he encountered a number of influential figures including Gene Webb and Harold Leavitt. and often voiced. The McKinsey consultant in his regulation dull suit. And. in many cases. popularized and. became a celebrity. in effect. While academics shift directions slowly and quietly in the obscurity of academic journals. Tom Peters (born 1942) was born and brought up near Baltimore. He continues to travel the world giving seminars.000 a day outside of the US). the first management guru. He has pandered to the masses. Peters does so in front of audiences of hundreds. the management guru industry has burgeoned.

) ‘Search was an out–andout attack on the excesses of the rational model and the business strategy paradigm that had come to dominate Western management thinking. Make no mistake.) ‘The book’s chief failure. (The only risky choice.’ wrote Peters later.Tom Peters
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celebrates today is liable to be dismissed in his next book – ‘I decide to write a new book when I feel disgusted and embarrassed by my previous one. Proctor & Gamble. and the celebration of trial and error (‘a bias for action’). which then proceeded to out-perform virtually all the others. The choices were hardly original or surprising – though none of the reviews of the book disputed the selection. (While the book celebrated the successful techniques employed by large companies many of the techniques are more easily and successfully employed by smaller companies. was that Waterman and I – both from conventional roots – mainly examined conventional firms’. General Electric. This also explains the book’s perennial appeal. there are more important fish to fry. The choices were large. it nonetheless celebrated big manufacturing businesses. in retrospect.’ he says. At the time. Peters and Waterman were McKinsey consultants and their selection reflected a natural bias towards the corporate giants which were McKinsey’s customers. To wit. Hewlett-Packard. What it counseled instead was a return to first principles: attention to customers (‘close to the customer’). we implicitly endorsed the humongous American technocratic enterprise in general – the institutions that economist John Kenneth Galbraith and business historian Alfred Chandler had not so long before declared almost perfect instruments for achieving America’s economic manifest destiny. With the exaltation of IBM and more than one nod to GM. Its selection of 43 ‘excellent’ organizations featured such names as IBM. says Peters. an abiding concern for people (‘productivity through people’). Bob
.1 His critics suggest that Tom Peters vacillates as readily as he pontificates. and largely uncontroversial and unsurprising – including the likes of IBM. Johnson & Johnson and Exxon. In Search of Excellence celebrated big companies. Wal-Mart and General Electric. as Peters recalls. ‘But whether or not Bob Waterman and I were on management’s case or on its side. A look at Peters’ books proves that this is undoubtedly true. was Wal-Mart. an enormous error that resided between the lines: While Search condemned the excesses of dispassionate modern management practice.

I consider In Search of Excellence a bad news book. Peters and Waterman’s conclusions were distilled down into eight crucial characteristics. were Galbraith’s and Chandler’s offspring!’2 In Search of Excellence presented. in retrospect at least. Okay it was 75 percent about islands of hope but that was what they were: exceptional. Hayes and Abernathy trashed American management and wrote it in the Harvard manual. The Japanese were seemingly taking over the industrial world. unemployment was rising. Peters and Waterman admitted that what they had to say was not particularly original. the bright side of an American crisis.The Ultimate Business Guru Book
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Waterman and I.
Two years after In Search of Excellence was published. ignored or overlooked by management theorists. ‘Managing our way to economic decline’. It was purposeful. summed up the air of despondency. an American business magazine covered its front page with a single headline: ‘Oops!’ It then went on to
. But. who came of age in the ‘50s and ‘60s. the logic of the book was that American management was screwed up. Peters views it a little differently: ‘In Search of Excellence was the first book written about things that work. they also had the insight to observe that the ideas they were espousing had been generally left behind. depression was a reality and the prospects for the future looked bleak. The management world was ready for good news and Peters and Waterman provided it. In Search of Excellence is. Admittedly. lean staff simultaneous loose–tight properties.’3 For such a trailblazing book. Managerial prescriptions were bleak – Robert Hayes and William Abernathy’s Harvard Business Review article. surprisingly uncontroversial. It was a brutal. on the surface at least. These have largely stood the test of time: • • • • • • • • a bias for action close to the customer autonomy and entrepreneurship productivity through people hands–on values driven stick to the knitting simple form. upfront attack on American management and McKinsey thinking.

but people still come up to me about the vignettes. ‘It was a collection of stories collected on the road. The single and undeniable fact that the excellent companies of 1982 were no longer all excellent two years later has continued to haunt Peters. The article claimed that about a quarter of the ‘excellent’ companies were struggling. says Peters. ‘A Passion for Excellence is probably my sixth favorite of my six books’. it was hugely successful but added little in the way of ideas.Tom Peters
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reveal that the companies featured in In Search of Excellence were anything but excellent.’ But Peters’ audience were increasingly restless.’ says Peters. was an answer to the big question: how could you become excellent? Thriving on Chaos opened with the bravado proclamation: ‘There are no excellent companies. tidying up’.’ The phone didn’t stop ringing and Peters’ next two books carried on in much the same vein. I wouldn’t disagree that I had been on the road too much and in that respect it was a great wake up call. Co-written with Nancy Austin.’ The major change in Peters’ thinking occurred at the beginning of the 1990s. a haphazard collection of anecdotes awkwardly shoved into a framework. Each chapter ended with a short list of suggested action points. They agreed that customer service was critical and that layer upon layer of bureaucracy was pointless. ‘This is probably the most quoted single line from Peters’ work – either used as proof of his inconsistency. ‘We started to get beaten up. so it wasn’t the best written book and the published version is a nightmare. ‘I was certain the phone would stop ringing. Peters admits. ‘It was organized in a hyper-organized engineering fashion. Thriving on Chaos was a lengthy riposte to all those critics who suggested that Peters’ theories could not be turned into reality. When the magazine ran the Oops story it was a bad week. It came from me talking to zillions of people and seminars. A Passion for Excellence emphasized the need for leadership. as evidence that he learned from his mistakes or as a damning indictment of his propensity to write in slogans. It is hopelessly disorganized.
. engineering-like. ‘Thriving on Chaos was the final. Thriving on Chaos. They believed what he said. Peters dismissed the past and heralded in a brave new world of small units. His next book. People read it for the soundbites. In effect.

ABB and Body Shop thrived through having highly flexible structures able to change to meet the business needs of the moment. Peters contended that his previous work was marred by paying too little attention to the perennially vexed question of organizational structure. previously ignored by Peters. size measured by market power. Peters did not mean structure in the traditional hierarchical and functional sense. indeed. it is simply proof that circumstances have changed. That is. To some extent I am a translator who is good at finding interesting examples which make it relevant to people. Peters is engagingly candid. say. Peters pronounced. If what he sees and what he thinks runs totally counter to what he has previously argued. (Not for nothing did Peters name his boat
. ‘When I’m writing I think whether people who’ve influenced me would throw tomatoes at it or not. simple yet complex. which can be very big indeed. After speaking on customer service for the previous decade. ‘Old ideas about size must be scuttled. I have no patience with consistency so regard it as a good thing. Peters noted ‘If you’ve done all the close-to-the-customer things that I begged you to do in my first three books .’ To Peters the moment is all important. New organizations demanded new management skills. not so much a matter of what it owns and directly controls. . and the exercise of imagination’. Examining his output. I’m not sure you’ll be any closer five years from now than you are today’. is “network big”.’ he wrote. anyone else who could help the business deliver.The Ultimate Business Guru Book
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freewheeling project-based structures. And herein lay Peters’ point.’ he says. these were the paradoxical structures of the future. Free-flowing. was predominant. impossible to pin down. Big was no longer beautiful and corporate structure. Indeed. . ‘My books could be by different authors. “New big”. ushered in a new era characterized by ‘curiosity. Companies such as CNN. Peters bade farewell to command and control. is a function of the firm’s extended family of fleeting and semi-permanent cohorts. ‘Tomorrow’s effective organization will be conjured up anew each day’. I consider inconsistency as a compliment. hierarchy-free teams in constant communication. his exemplars of the new organizational structure were notable for their apparent lack of structure. Key to the new corporate structures envisaged by Peters were networks with customers. with suppliers and. unchartable. initiative.

get on with the job. ‘Ideas and strategies are important. of course. it appears to strike a chord – Peters can claim a long list of adherents including ABB’s Percy Barnevik and Northwestern’s Herb Kelleher. His recent work has a more personal emphasis. and at times indiscriminately. Peters believes it is ‘a bias for action’. While making things happen is a consistent refrain in Peters’ books. however. Peters has also proved remarkably adept at picking up ideas at exactly the right time. His seminars roam widely. but execution is the real challenge’. the sprawling Liberation Management anticipated much of the later work on teams and project–led organizations. regardless of the business we happen to be in. With managers.’) Indeed. from customer service to free trade. Over 15 years he has moved from a corporate world view to one centered on individuals. In Search of Excellence was successful because it brought good news at a time of widespread depression. the shift in emphasis has undoubtedly been dramatic. Peters stalks restlessly from one issue to another. ‘Regardless of age. ‘In the Covey–Blanchard world there is something. While Michael Porter covers competitiveness and Rosabeth Moss Kanter human resources. Peters has moved with the flow of ideas – but has always managed to be ahead of the tide. Thriving on Chaos was published on the day Wall Street crashed and promised a way through the uncertainty. It does boil down to personal transformation. If there is a consistent strand through his work. he ushers in a new era in the world of brands. regardless of position. This is a message which leads academics to shake their heads at its simplicity. For example. says Barnevik. Tom Peters believes that his fundamental thinking remains largely unchanged. Corporate aid has metamorphosed into self–help.Tom Peters
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‘The Cromwell’ inspired by Cromwell’s comment ‘No one rises so high as he who knows not whither he is going. the world of gurus like Kenneth Blanchard and Stephen Covey. in typically breathless style. from politics to health and fitness. what distinguishes Peters – and partly explains his success – is that he is not shackled to a particular perspective. all of us need
. and its case studies (such as ABB and CNN) have been relentlessly explored. Forget the theorizing.’ Peters observes.

The big names still exist but they no longer have a monopoly over the art of branding. His most recent book. Liberation Management. he says. New York. The Circle of Innovation. Peters points to the rise of the Internet as evidence of a new. takes the style and exuberance that has built up over his recent work a stage further. Self-creation is the order of the day. you return to the Web site you trust and gain the most value from. Tom. a definition as applicable to a pack of corn flakes as an interesting résumé. in the end. you figure out what it takes to create a distinctive role for yourself – you create a message and a strategy to promote the brand called You. The Tom Peters of the late 1990s is a million miles away from the Tom Peters of 1982. Peters’ idea of what constitutes a brand remains somewhat traditional. ‘The brand called you’. Peters. it is a million miles away from the buttoned–down world of McKinsey and the ‘straight’ In Search of Excellence. our most important job is to be head marketer for the brand called You. there is the individual. but in moving on at all he has taken more risks than most.
. What is interesting – and paradoxical – is that amid this branding frenzy. Interview with the author. The new world of brands is radically different.’ Peters argues that Marlboro Friday in 1993 (when Philip Morris slashed the prices of its premium cigarette brand) marked the end of a generation of big brands. Boisterous and belligerent.
Notes
1 2 3 4 Interview with the author. says Peters. Peters has moved on. Tom. After all. Alfred P Knopf.4 Peters has traveled a long way to conclude that.The Ultimate Business Guru Book
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to understand the importance of branding’. more personal brand generation. To be in business today. Peters. ‘We are CEOs of our own companies: Me Inc. ‘The brand is a promise of the value you’ll receive’. To where he probably doesn’t know.’ says Peters. Increasingly we need to promote our own personal brands through such things as developing our contacts or updating our résumés. ‘If you’re really smart. Fast Company. August/September 1997. 1992.

the economist. Michigan in 1947. These initiatives led to new laws and a variety of initiatives.1 Porter has served as a counselor on competitive strategy to many leading US and international companies and plays an active role in economic policy with the US Congress. He has also acted as a consultant to countries as diverse as Portugal and India. labor and academic leaders formed in 1986. Born in Ann Arbor. ‘If anyone is capable of turning management theory into a respectable scholarly discipline. Las Vegas it isn’t. Porter’s father was an army officer and he spent his youth moving around the world.
. noted The Economist. At Princeton he played intercollegiate golf and was named in the 1968 NCAA Golf All-American team. Michael Porter is perhaps the thinker with the greatest influence. He joined the Harvard faculty at the age of 26 – one of the youngest tenured professors in the school’s august history. a private sector group of business. He serves on the executive committee of the Council on Competitiveness. Rather than pursuing a career as a professional golfer. While completing his PhD Porter came under the influence of Richard Caves. But then again. Porter is precociously talented and intellectually persuasive.) Porter went to Princeton University where he obtained a degree in aerospace and mechanical engineering. He was also an all-state high school football and baseball player. Porter plays golf with the President. This is not simply to keep the President company. who became his mentor. business groups and as an adviser to foreign governments. Porter has also exerted huge local influence on the state of Massachusetts. it is Michael Porter’. (He later served in the US Army Reserve reaching the rank of Captain. He runs workshops at Harvard for newly appointed CEOs – of billion-dollar corporations. What is astonishing about Porter’s allure is that his area of expertise is business strategy. He wrote The Competitive Advantage of Massachusetts (1991) and chaired the state’s Council on Economic Growth and Technology in Massachusetts.The Ultimate Business Guru Book
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If Peter Drucker is the intellectual giant of management thinking and Tom Peters its most charismatic populist. Porter took a Harvard MBA (1971) and followed this with a doctorate in business economics (1973).

The bargaining power of buyers. If there are viable alternatives to your product or service in the marketplace. This will reduce profit margins and. thus reducing profits. The five forces (outlined in Porter’s bestselling Competitive Strategy) were a means by which a company could begin to understand its particular industry. The bargaining power of suppliers. The threat of substitutes. and can change as an industry evolves. New competitors necessitate some competitive response. rates of return on investment in excess of the cost of capital. whether it is domestic or international or produces a product or a service. on average. The strength of the five forces varies from industry to industry. which states that ‘in any industry. which have to be changed and challenged if an organization is to achieve
. however. affect profitability. Initially. which will reduce your profits. they were passively interpreted as valid statements of the facts of competitive life. For example.’ Porter observed. industry-wide and national level. as a result. R&D or price reductions.
• •
• •
‘The collective strength of these five competitive forces determines the ability of firms in an industry to earn. Porter took an industrial economics framework – the structure–conduct performance paradigm (SCP) – and translated it into the context of business strategy. Competition leads to the need to invest in marketing. The rivalry among the existing competitors. From this emerged his best known model: the five forces framework. which will inevitably use some of your resources.Michael Porter
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Porter’s genius has lain in producing brilliantly researched and cogent models of competitiveness at a corporate. the prices you can charge will be limited. they are more regularly interpreted as the rules of the game. the rules of competition are embodied in five competitive forces’. suppliers will increase their prices and adversely affect your profitability. If customers have bargaining power they will use it. These five competitive forces are: • The entry of new competitors. Now. Given power over you.

The firm stuck in the middle is almost guaranteed low profitability. and could not resolve. the suggestion is that it actually is better used as a means of provoking questions. Companies with a clear strategy outperform those whose strategy is unclear or those that attempt to achieve both differentiation and cost leadership. Porter argued that there were three ‘generic strategies’. and organizational arrangements are diluted if there’s more than one primary target. Porter nearly left the obvious next question – what can we do about it? – unanswered. offering products or services at the lowest cost. ‘Porter’s translation did not resolve. The second was cost-based leadership. Porter wrote. differentiation) so that customers will pay a premium to cover higher costs. Focus was the third generic strategy identified by Porter. Now. It either loses the high-volume customers who demand low prices or must bid away its profits to get this business away from low–cost firms. Quality and service are not unimportant. ‘The firm lacks the market share. he said. the industry-wide differentiation necessary to obviate the need for a low-cost position. competitive forces’. ‘Effectively implementing any of these generic strategies usually requires total commitment.The Ultimate Business Guru Book
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any impact in a particular market. service. competing on the basis of value added to customers (quality. A late addition to his book was the concept of generic strategies. though this is rarely possible’. The first of Porter’s generic strategies was differentiation. or the focus to create differentiation or low cost in a more limited sphere. ‘viable approaches to dealing with . ‘Sometimes the firm can successfully pursue more than one approach as its primary target. . Strategy.2 The five forces framework was once seen as providing all the answers. but cost reduction provides focus to the organization. and resolve to play the low-cost game. in Porter’s eyes. Why did some companies manage the five forces better than others? notes John Kay of Oxford’s Said Business School. . capital investment.’ If a company failed to focus on any of the three generic strategies it was liable to encounter problems. Yet it also
. the fundamental weakness of the SCP approach. Having mapped out the facts of competitive life. ‘The firm failing to develop its strategy in at least one of the three directions – a firm that is stuck in the middle – is in an extremely poor strategic situation’. was a matter of how to compete.

‘This work can be read on three levels: as a general inquiry into what makes national economies successful. Porter’s 1990 book. ‘Why are firms based in a particular nation able
. Italy. At its heart was a radical new perspective of the role and raison d’être of nations. They had to be differentiated. through improved service or speedier development. was The Competitive Advantage of Nations’. must be ranked as one of the most ambitious books of our times. encompassed ten countries: the UK. Denmark. The reassurance proved short-lived. Korea. Less than a decade later. Porter has moved on to expand the range of his research. Singapore. The book emerged from Porter’s work on Ronald Reagan’s Commission on Industrial Competitiveness. and as a series of prescriptions about what governments should do to improve their country’s competitiveness. in fact. companies were having to compete on all fronts. said The Economist. ‘The book that projected Mr Porter into the stratosphere.’ When Competitive Strategy was published in 1980. Porter charted their transformation from being military powerhouses to economic units whose competitiveness is the key to power. Indeed. Porter’s generic strategies offered a rational and straightforward method of companies extricating themselves from strategic confusion. It now encompasses countries as well as companies. The firm stuck in the middle also probably suffers from a blurred corporate culture and a conflicting set of organizational arrangements and motivation system. the US and Germany (then West Germany). New Zealand. The Competitive Advantage of Nations. Japan. Sweden. Switzerland. India. Canada. and be cost leaders. as a detailed study of eight of the world’s main modern economies. cheaper than their competitors. read by aspiring intellectuals and despairing politicians everywhere.Michael Porter
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loses high-margin businesses – the cream – to the firms who are focused on highmargin targets or have achieved differentiation overall. Portugal and the state of Massachusetts. Porter sought to build on the ideas of his previous books to examine what makes a nation’s firms and industries competitive in global markets and what propels a whole nation’s economy to advance. Porter has since extended his study to include Japan.’3 Porter’s research.

the home nation takes on growing significance because it is the source of the skills and technology that underpin competitive advantage. and why some firms are more aggressive in pursuing them.’ said Porter. The ability to do so depends not on the amorphous notion of “competitiveness” but on the productivity with which a nation’s resources (labor and capital) are employed.’ he wrote.’ Porter also laid down a challenge.’ Porter’s conclusion was that it is the intensity of domestic competition that often fuels success on a global stage. With fewer impediments to trade to shelter uncompetitive domestic firms and industries. instead it seems to make it more so. perhaps to himself. would appear to suggest that the nation has lost its role in the international success of its firms. ‘The principal economic goal of a nation is to produce a high and rising standard of living for its citizens. ‘Productivity is the prime determinant in the long run of a nation’s standard of living. Companies and industries have become globalized and more international in their scope and aspirations than ever before. at first glance. to solve another perennial mystery: ‘Much is known about what competitive advantage is and how particular actions create or destroy it. Porter’s research led to different conclusions. an ambitious move in itself given the nature of the nationalistic minefield he ventured into. on the surface at least. chocolate and trading? Why are leaders in heavy trucks and mining equipment based in Sweden?’ Porter returned to first principles. seem to have transcended countries.’ Unlike Kenichi Ohmae who champions the ‘end of the nation state’. ‘While globalization of competition might appear to make the nation less important. To make sense of the dynamics behind national or regional strength in a
. ‘Why is tiny Switzerland the home base for international leaders in pharmaceuticals. Yet what I have learned in this study contradicts this conclusion. ‘Companies. He identified a central paradox. Much else is known about why a company makes good choices instead of bad choices in seeking bases for competitive advantage. This.The Ultimate Business Guru Book
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to create and sustain competitive advantage against the world’s best competitors in a particular field? And why is one nation often the home for so many of an industry’s world leaders?’ he asked.

is ahead in health services due to heavy national demand. Kay. This may enhance operational effectiveness but the essence of strategy lies in selecting a unique and valuable position rooted in systems of activities that are much more difficult to match. He laments that the profusion of management tools has taken the place of strategy.’4
Notes
1 2 3 4 ‘Professor Porter PhD’. Firm strategy. Financial Times. The US. university research and the availability of scientists. 8 October 1994. 8 October 1994. Related and supporting industries – industries that are strong in a particular countries are often surrounded by successful related industries. now they embrace data communications. but it has attracted a mass audience to his work. ‘Professor Porter PhD’. To some this cheapens his research. Most recently. ‘Management prefers to lurch from one tool to another rather than formulating a coherent strategy. engineers or experts in a particular field. for example.
. ‘Why gurus should cross the bridge into business’. Demand conditions – if there is strong national demand for a product or service this can give the industry a headstart in global competition. Porter has once again returned to first principles to consider the very nature of strategy. 17 November 1997.Michael Porter
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particular industry. ‘What is strategy?’. He has the ability to distil vast amounts of complex data and material into relatively robust frameworks. November/December 1996. The Economist.
•
• •
Such frameworks are a typical Porter technique. Porter developed the national ‘diamond’. John. Porter. Michael. This is made up of four forces: • Factor conditions – these once would have include natural resources and plentiful supplies of labor. Harvard Business Review. The Economist. structure and rivalry – domestic competition fuels growth and competitive strength.

Edgar H. Schein
“The company is an economic vehicle invented by society. Schein Social psychologist Born 1928
Breakthrough ideas
Corporate culture Career anchors
Key books
Organizational Culture and Leadership Organizational Psychology
. It has no rights to survive. People take it with them. But value systems and philosophies survive.” Edgar H.

He completed a PhD in social psychology at Harvard and. after graduating in 1952.’1 Returning home. particularly over the last 20 years. ‘I never regretted joining MIT. when Schein and every available psychologist was mobilized to deal with the repatriation of POWs. Schein is one of the originators of the field of organizational psychology and worked closely with the human resources school of the late 1950s and 1960s. It was a fated decision. obedient character brilliantly exposed in William Whyte’s classic Organization Man. ‘There were enormous similarities between the brainwashing of
. Schein’s first paper was entitled ‘Management development as a process of influence’. ‘McGregor asked me to work with him at MIT.The Ultimate Business Guru Book
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Social psychologist Ed Schein (born 1928) has eschewed a high media profile during a lengthy academic career. He said come here and figure out what you want to do. it turned out to be a good decision as psychology in business schools became far more interesting. Yet his work has exerted a steadily growing influence on management theory. Ed Schein graduated from Chicago in 1946 and then studied at Stanford. ‘We were shipped to Korea to spend time with repatriated POWs on their 16-day voyage way back. Schein received a letter from Douglas McGregor who knew of Schein’s work through Gordon Allport at Harvard and because Schein had taken a couple of seminars at MIT where McGregor was based. His thinking on corporate cultures and careers has proved highly important.’ Schein recalls. It is an open.’ Schein joined MIT in 1956 and initially worked under the influence of Douglas McGregor. He has remained there ever since. In retrospect. At MIT Schein soon noted the similarities between the brainwashing of POWs and the corporate indoctrination carried out by the likes of GE at its Crotonville training base and IBM at Sands Point. This came to a halt with the end of the Korean War. This was the era of corporate man – a greysuited. creative place. carried out research into leadership as part of the Army Program. which applied the brainwashing model from prison camps to the corporate world. I left traditional social psychology for a business school. ‘I was stuck in Inchon in Korea three extra weeks and started the whole process of interviewing people. It was a smart move by the government.’ he says.

The work at Bethel provided long-lasting inspiration for Schein. its executives often took the culture with them when they left to set up their own businesses or to manage elsewhere. ‘The Digital culture is dead. More important than my academic training was my experience and practice working with groups. In the same year.’ Interesting to Schein was the fact that though the Digital culture imploded. ‘HP emerged at the same time as DEC but was better at transforming itself. DEC had too many projects and creative people. ‘I didn’t see brainwashing as bad. who joined the MIT team in 1957. the approach became dysfunctional. we don’t approve of brainwashing. a term which Schein is widely credited with inventing. Schein was directed to learn more about sensitivity group training and met Chris Argyris at the National Training Laboratories at Bethel. Olsen couldn’t control it. but the culture does. It diversified. but not in individuals. His research into the area included work with Ken Olsen and Digital Equipment Corporation (anonymously cited by Schein as Action Co.’ says Schein. recent trends. He continued to visit Bethel every summer for the next 10–15 years. says Schein. As he points out. If we don’t like the values. Schein
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the POWs and the executives I encountered at MIT’. Coercive Persuasion.’ he says.’ From this work came Schein’s book. I learned that you never have pure individualism or pure groupism.). ‘I realized I was a group expert who knew nothing about groups. What he did fitted the market of the time but. He makes a comparison between the fate of Digital and that of its corporate contemporary Hewlett-Packard. What was bad were the values of the Communists. Douglas McGregor also recruited Warren Bennis.Edgar H. such as the learning organization (championed by his MIT colleague Peter Senge). when the market matured.’ The dynamics of groups and Schein’s knowledge of brainwashing led to a developing interest in corporate culture. ‘Ken Olsen at DEC really empowered people. Creativity is functional at certain times and can become dysfunctional. The economic unit has no right to survive. The ability of strong values to influence groups of people is a strand which has continued throughout Schein’s work. devolving into creative
. are derivatives of brainwashing – ‘Organizational learning is a new version of coercive persuasion. There is always a balance.

Organizational diversity may be more important than individual diversity. These basic assumptions.The Ultimate Business Guru Book
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units. One reason for the success of the US is maybe that it has never throttled sub-cultures. Schein’s ‘basic assumptions’ are rephrased and reinterpreted elsewhere in a variety of ways – perhaps the nearest is Chris Argyris’ term ‘theories-in-use’. think. • The nature of human nature – organizations differ in their views of human nature. Schein suggests an alternative approach – ‘being-inbecoming’ – emphasizing self-fulfillment and development. dictatorship. Schein describes culture as ‘a pattern of basic assumptions – invented. others are submissive. or through simple acceptance that if something achieves the objective it is right. Schein took a more psychological view. Some follow McGregor’s Theory X and work on the principle that people will not do the job if they can avoid it. Instead of regarding everything an organization does as part of its culture. •
. Others regard people in more positive light and attempt to enable them to fulfill their potential for the benefit of both sides. discovered. • The nature of reality and truth – organizations and managers adopt a wide variety of methods to reach what becomes accepted as the organizational ‘truth’ – through debate.’ Schein’s work on corporate culture culminated in the 1985 book Organizational Culture and Leadership. can be categorized into five dimensions: Humanity’s relationship to nature – while some companies regard themselves as masters of their own destiny. and feel in relation to those problems’. or developed by a given group as it learns to cope with its problems of external adaptation and internal integration – that has worked well enough to be considered valid and therefore to be taught to new members as the correct way to perceive. willing to accept the domination of their external environment. • The nature of human activity – the West has traditionally emphasized tasks and their completion rather than the more philosophical side of work. Diversity talks about people rather than sub-cultures. says Schein. Achievement is all.

Some facilitate social interaction.’ says Schein. (This spawned a wave of interest in the heroic creators of corporate cultures from Henry Ford to IBM’s Thomas Watson.) Schein identifies three stages in the development of a corporate culture – ‘birth and early growth’. Culture does not stand still. He observes that the three cultures rarely co-exist happily – ‘We have in most organizations three different major occupational cultures that do not really understand each other very well and that often work at cross-purposes with each other’ The operational culture generally dominates. the engineering culture (created by ‘the designers and technocrats who drive the core technologies of the organization’) and the executive culture formed by executive management. the CEO and immediate subordinates.Edgar H. More recently. but are in a constant state of development and flux. ‘organizational mid-life’. Schein •
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The nature of human relationships – organizations make a variety of assumptions about how people interact with each other. though recent years have seen the excesses of the executive culture in downsizing and of the engineering culture in re-engineering. while others regard it as an unnecessary distraction. an entire corporate culture. Schein acknowledges that a single person can shape these values and. It spawned a host of research projects and books on the subject. Schein’s work on culture has identified three cultures of management which he labels ‘the key to organizational learning in the 21st century’. The three cultures are the operator culture (‘an internal culture based on operational success’). Organizational Culture and Leadership clarified the entire area of corporate culture in a way no-one previously had achieved.
. I hadn’t thought of it like that before and think that I’m one of the few to realize that we’ve always taken the point of view of the operators and have overlooked the other two cultures.
These five categories are not mutually exclusive. and ‘organizational maturity’. as a result. ‘The three cultures of management suddenly came to me. Key to the creation and development of corporate culture are the values embraced by the organization.

To do so he had to deal with the hard and then the soft issues. They respond to capital markets. May be we should ask engineers to be better engineers rather than more humane. a financial crisis will always get their attention. is a simple statement of the facts of corporate life rather than a cynical prescription. He wanted value to be added all the way down the organization so he taught managers how to add value in the economic sense. By the time people become CEOs they are preoccupied with survival and money. stockholders. Schein suggests that John Sculley’s move from Pepsi to Apple was doomed from the outset as he was a nonengineer moving to an engineering culture. Their job is often not to be humane. Success is related to how well the three cultures are aligned. Companies need to pay much more attention to understanding the cultures of engineers and CEOs. ‘CEOs worry about the financial side rather than whether they are paying enough attention to people and I am beginning to think that it is commonsense that CEOs are like that. (Schein goes on to suggest that IBM’s downturn could be attributed to forgetting that sales and marketing were the core of the business. Once they understand the economics. easily disturbed. acknowledging that our old assumptions often no longer work. Schein advocates taking the entire concept of culture more seriously. cultures are often pushed out of alignment.’ he says. etc. Even if they try or want to be peopleoriented. as Schein sees it.The Ultimate Business Guru Book
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Within Schein’s three cultures lies a more controversial sub-text. and learning how to create cross cultural dialogues. Lou Gerstner’s move to IBM offered more potential as IBM was a sales rather than an engineering culture.) To resolve the gulf between the three cultures. In contrast. the CEO set about creating what I would call a learning organization.’ Schein’s point is that. ‘It is the ends while the better
. he started working on the soft stuff. For example. It is a precarious balance. to see people as impersonal resources.’ This. in a capitalist system. We have never got into the mentality of CEOs or engineers in a helpful way. Schein provides an example: ‘At Shell in the US. ‘Engineers also have to engineer people out the equation. We should be seeking to understand how we can help them to do it better. economic viability is more important than how human resources are managed. when executives move from one industry to another.

Edgar H. Wokingham.’ Schein’s work and the issues he covers slip in and out of fashion. but we have to keep examining the essentials.’ Balance is all.
Bibliography
Personal and Organization Change Through Group Methods: The Laboratory Approach (with Warren Bennis). which is the underlying career value that we could not surrender. Saying the customer is king is as stupid as saying the stockholder is king. He originated key phrases such as the psychological contract – the unspoken bond between employee and employer – and careers anchors. Lifestyle has become the increasingly important career anchon. 1978. finding new things to think about and revisiting old things in new ways. The great executives understand it is a complex game. ‘What I have always enjoyed is my own learning process.’ This applies to Schein’s own career. ‘Over the last 25 years. ‘I have never had a single mission. He shrugs his shoulders. They value customers. Schein proposed that once mature we have a single ‘career anchor’. employees and stockholders. Addison Wesley. Career Dynamics: Matching Individual and Organizational Needs.’
Notes
1 Interview with the author. he says. I thought that was a great compliment. ‘The great companies take all their stakeholders seriously. June 1997. He identifies his family life as his career anchor. because of dual careers and social changes the emphasis of careers has shifted’. ‘When I look at a lot of the fads they come back to the same underlying theories. Schein
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organization of people is the means. I learn most from what people do and watching them. In a way it is flattering that issues I have thought and written about keep resurfacing. New York. Someone once said that my ideas had evolved. The puzzle is why we have to keep reinventing. John Wiley.’ Another focus of Schein’s attentions in recent years has been the subject of careers. 1965. It is probably healthy because it makes people more independent.’ he says.
. ‘The career is no longer over arching.

” Peter Senge American academic Born 1947
Breakthrough ideas
The learning organization
Key book
The Fifth Discipline
. It is our experience that 90 percent of the time what passes for commitment is compliance.Peter Senge
“Real commitment is rare in today’s organizations.

a Ford or a Sloan or a Watson. explains Senge. Senge studies how firms and other organizations can develop adaptive capabilities in a world of increasing complexity and rapid change. He argues that vision. Out of these efforts. Senge graduated in engineering from Stanford before doing a PhD on social systems modeling at MIT. are emerging. it is rarely fully understood – and it is even rarer to actually find a ‘learning organization’. Little.’ says Senge. alignment and systems thinking are essential for organizations.’1 The learning organization emerged from extensive research carried out by Senge and his team at the Center for Organizational Learning.The Ultimate Business Guru Book
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Peter Senge (born 1947) is director of the Center for Organizational Learning at the Massachusetts Institute of Technology. ‘For the past 15 years or longer. work must become more learningful. ‘As the world becomes more interconnected and business becomes more complex and dynamic. While the phrase is used with great abandon by other theorists as well as executives. Senge gave managers tools and conceptual archetypes to help them understand the structures and dynamics underlying their organizations’ problems. ‘It is no longer sufficient to have one person learning for the organization. accomplish things that are important to them. ‘The traditional meaning of the word learning is much deeper than just taking information in. now part of Arthur D. and how to make progress in moving organizations along this path. It’s just not possible any longer to “figure it out” from the top.’ These organizations are what have now been labeled ‘learning organizations’ and it is for this term that Senge is best known.
. The organizations that will truly excel in the future will be the organizations that discover how to tap people’s commitment and capacity to learn at all levels in an organization. Innovation Associates. a learning organization is a group of people who are continually enhancing their capability to create their future’. ‘In the simplest sense. He is founding partner of the training and consulting company. purpose. and have everybody else following the orders of the “grand strategist”. many of us have been struggling to understand what “learning organizations” are all about. In his book The Fifth Discipline. I believe some insights.’ wrote Senge. It is about changing individuals so that they produce results they care about.

which has spawned numerous books. Team learning – the discipline of team learning involves two practices: dialogue and discussion. though few go beyond the basic metaphor. Shared vision – here Senge stresses the importance of co-creation and argues that shared vision can only be built on personal vision. Personal mastery – Senge grounds this idea in the familiar competencies and skills associated with management. This discipline involves two underlying movements: continually learning how to see current reality more clearly. Picking up on the work of some of MIT colleagues. and the ensuing gap between vision and reality produces the creative tension from which learning arises. The former is characterized by its exploratory nature. such as the way certain kinds of problems persist. such as Jay Forrester. Senge introduced the idea of systems archetypes In practical terms this can help managers spot repetitive patterns. recognizing that things are interconnected. Ibis has pushed managerial thinking towards contemplating complexity theory. but the benefits of combining them only come from having previously separated them.Peter Senge He suggests there are five components to a learning organization: •
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•
•
•
•
Systems thinking – Senge champions systems thinking. The two are mutually complimentary. or the way systems have their own in-built limits to growth. He regards corporations as complex systems. He claims that shared vision is present when the task that follows from the vision is no longer seen by the team members as separate from the self. Mental models – this essentially deals with the organization’s driving and fundamental values and principles. the latter by the opposite process of narrowing down the field to the best alternative for the decisions that need to be made. Most teams lack the ability to distinguish between
. Senge alerts managers to the power of patterns of thinking at the organizational level and the importance of nondefensive inquiry into the nature of these patterns. but also includes spiritual growth – opening oneself up to a progressively deeper reality – and living life from a creative rather than a reactive viewpoint.

In the learning organization managers are researchers and designers rather than controllers and overseers. says Senge. maybe. he’d made what he called “job limiting choices”. yet another fad which can be implemented. and to ‘conduct conversations with each other around difficult and volatile issues in a way that creates deep understanding. ‘The learning organization has become one of the prominent management fads of the first half of the 1990s – at least if you judge by the coverage in the business press. ‘Being in the middle of all this had made me acutely aware of the larger forces within which this one little book has been swept along.’2 Senge argues that the interest in the concept of the learning organization is proof that institutions and people are ready for major change. One man told me that by adopting the learning organization model. Earnest attempts to turn it into reality have floundered. ‘Yet they go on.The Ultimate Business Guru Book the two and to move consciously between them. The trouble is that the learning organization is regarded as an instant solution. when working with companies Senge says that he seeks to enable individuals and teams to recognize. and co-operation rather than ducking and blaming’. to understand the complexity of organizations and the ‘interconnectedness’ within them.
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For the traditional organization. But what would that have brought him? A higher pension fund and more stock. Our
. articulate and align the goals most critical to them. empathy. the learning organization poses huge challenges. Senge argues that managers should encourage employees to be open to new ideas. In practice. ‘I know people who’ve lost their jobs supporting these theories’. form a collective vision and work together to achieve their goal. That’s not what matters. communicate frankly with each other. I have come to believe that there is an opening today for a new movement of meaning and change. understand thoroughly how their companies operate. innovation. What he meant was that he could have climbed the corporate ladder faster by rejecting my theories and toeing the company line. by the number of conferences organized and by recognition from prestigious institutions’. Senge has admitted.

’3 Change is not viewed by Senge as an organizational phenomena but as something which must also affect us as individuals. ‘Part of the trouble is that if you give something a label people expect a product. The two extremes have not been bridged.’
Notes
1 2 3 Quoted in Napuk. Applewood Internet site. 1994. If we do not change. 1990.).. Financial Times. London. ‘Live and learn’.. the fact that the learning organization is a process means that accrediting improvements to it is sometimes difficult. ‘A growing wave of interest and openness’. ‘The learning organization concept came laden with huge promise which has worryingly disappeared from view’. B. Ross. R. our organizations will not change. 1997. Doubleday. says Phil Hodgson of Ashridge Management College. V. Peter. companies which have incorporated Senge’s ideas have often been very successful – once again. The learning organization is not a product but a process and processes are a lot harder to talk about in board meetings. Scottish Business Insider. The demise of General Motors and IBM has one thing in common with the crisis in America’s schools and “gridlock” in Washington – a wake-up call that the world we live in presents unprecedented challenges for which our institutions are ill prepared. Organizations regard learning as a route to competitive advantage. This is perhaps where the problem of implementation lies. Smith. Senge.
.. C. January 1994. 12 April 1995. K. New York. On the positive side. however.
Bibliography
The Fifth Discipline: The Art and Practice of the Learning Organization. Nicholas Brealey. Quoted in Griffith.Peter Senge
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traditional ways of managing and governing are breaking down. ‘Corporate fashion victim’. A. individuals regard it as a route to personal advantage. The Fifth Discipline Fieldbook: Strategies and Tools for Building a Learning Organization (with Roberts. and Kleiner.

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“In practically all our activities we seem to suffer from the inertia resulting from our great size. . Sometimes I am almost forced to the conclusion that General Motors is so large and its inertia so great that it is impossible for us to be leaders. There are so many people involved and it requires such a tremendous effort to put something new into effect that a new idea is likely to be considered insignificant in comparison with the effort that it take to put it across .Alfred P Sloan . .” Alfred P Sloan Car industry executive 1875–1966
Breakthrough ideas
The divisionalized organization
Key book
My Years with General Motors
.

Wilson. Sloan was general manager of the Hyatt Roller Bearing Company at the age of 24 and became president when it merged with United Motors which. At the time. His aim was a car for ‘every purse and every purpose’. should not cloud the size of Sloan’s contribution to theory and practice.The Ultimate Business Guru Book
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In 1908. Sloan became GM’s chief executive in 1946 and honorary chairman from 1956 until his death. Sloan cut the eight models down to five and decided that rather than competing with each
. William Crapo Durant (1861–1947) founded the General Motors Company of New Jersey. in the early 1950s. became part of General Motors in 1917. Sloan (1875–1966) who was the company’s legendary chief during its formative years. told the US Senate Armed Forces Committee: ‘What is good for the country is good for General Motors and what’s good for General Motors is good for the country’. For much of this century. to a significant degree. Sloan thought otherwise and concentrated GM’s attentions on the. Initially a director and vice-president. With Ford cornering the mass market. Sloan was also one of the first managers to write an important theoretical book. General Motors managed to scrimp and scrap its way to around 12 percent. Less than half a century later. As well as being the architect of GM. When Sloan took over General Motors the fledgling automobile market was dominated by Ford. The relative dullness of the book. My Years With General Motors (1963). GM was an unwieldy combination of companies with eight models that basically competed against each other as well as against Ford. middle market. the company’s Charles E. In 1920 Ford was making a car a minute and the famously black Model T accounted for 60 percent of the market. the accepted wisdom was that the only alternative for competitors lay in the negligibly sized luxury market. Researching her case study of GM for The Change Masters. At the time. That it has done so can. Under Henry Ford the company had become a pioneer of mass production techniques (see pp. there were few dissenters with such sentiments. in turn. as yet non-existent. 65–8). GM has stood as a symbol of the might of corporate America. Rosabeth Moss Kanter was told by then GM chairman Roger Smith that his aim was to ‘return this company to the way Sloan intended it to be managed’ – and that was over 30 years after Sloan’s death. be attributed to Alfred P.

if you said the word Pontiac. So I thought we should publicize the parent company. Central to this was his ‘organization study’ which. said one observer. structure or direction had apparently been overlooked in GM – though this was principally because it had never been done before.’ said Business Week. any consumer in the country could tell you what kind of person drove it. didn’t know anything about GM. The operating units were
. The challenge Sloan faced was that any thought of providing some sort of overall corporate culture. Pontiac. While all this made commercial sense. Ford had been able to achieve standardization and mass production by producing as narrow a product range as possible. It should be noted that in virtually all cases. Sloan set about creating a coherent organization from his motley collection. Sloan inherited an organization that was ill-suited to deliver his aspirations. Each of the units was made responsible for all their commercial operations with their own engineering. this could be achieved. In the jargon (invented 50 years later) they were strategic business units. but was supervised by a central staff responsible for overall policy and finance.Alfred P. Sloan
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other. appeared to ‘have sprung entirely from his own head in 1919 and 1920’. GM offered choice. (Sloan had a modest habit of suggesting that ideas just came to his mind. His conclusion was that through better running of the organization of the company. reliable cars. each model would be targeted at a particular segment of the market. Explaining the company’s move into advertising. ‘Back then. he said: ‘I had some consumer studies made in 1922.’) As a result of his organization study. in the early 1920s Sloan organized the company into eight divisions – five car divisions and three component divisions. and we found that people throughout the US. Sloan wanted to produce a far greater range from a rag bag of companies – GM had been built up through the regular and apparently random acquisition of small companies. Buick and Cadillac – were to be updated and changed regularly and came in more than one color. production and sales departments. This was an examination of the way the organization worked and was a new and novel idea. they didn’t come to anyone else’s mind. except at the corner of Wall and Broad Streets. Oldsmobile. Ford continued to offer functional. as opposed to the production line.1 The five GM ranges – the Chevrolet.

recently observed The Economist. Ford ignored management. the deficiencies and eccentricities of managerial behavior. divisionalized organization. Sloan. By 1925.) ‘Alfred Sloan did for the upper layers of management what Henry Ford did for the shopfloor: he turned it into a reliable.3 And yet. as far as was possible. Sloan’s segmentation of the market changed the structure of the car industry – and provided a model for how firms could do the same in other industries. Sloan was committed to what at the time would have been regarded as progressive human resource management.2 It should not be forgotten that Sloan was an engineer. the components divisions not only sold products to other GM companies. charged with maintaining market share and sustaining profitability in their particular area. and generate profits’. In a particularly innovative move.The Ultimate Business Guru Book
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semi-autonomous. say contemporary thinkers Sumantra Ghoshal and Christopher Bartlett. It required a continuous balancing act. (While this was its first sustained practical usage. In 1947 Sloan established GM’s employee-research section to look at employee attitudes and he invested a large
. His system aimed to eliminate. with its new organization and commitment to annual changes in its models. The multi-divisional form enabled Sloan to utilize the company’s size without making it cumbersome. which Sloan labeled ‘federal decentralization’. but also to external companies. marked the invention of the decentralized. Sloan’s ideas can be traced back to Henri Fayol’s functional approach – though there is no evidence that Sloan was an adherent of Fayol’s. Executives had more time to concentrate on strategic issues and operational decisions were made by people in the front line rather than at a distant headquarters. Peter Drucker observed. create markets and sales. which continued to persist with its faithful old Model T. GM had overtaken Ford. Sloan sought to make management highly efficient. was entirely focused on ‘managing a business so that it can produce effectively. Sloan and Henry Ford had entirely different approaches. provide jobs. From a managerial point of view. machine-like process’. ‘The multi-divisional organization was perhaps the single most important administrative innovation that helped companies grow in size and diversity far beyond the limits of the functional organization it replaced’. This policy. efficient.

the front-line business unit managers in the divisionalized corporation were neither expected to nor could scout for new opportunities breaking around the boxes in the organization chart that defined their product or geographic scope. Stringent targets and narrow measures of success stultified initiative.’ The multi-divisional form. could not absorb the large central overheads and yet return the profits needed to justify the financial and human investments. and the sources of the data can be reconfigured. After being lauded as a managerial hero by Alfred Chandler and Peter Drucker. existing knowledge bases can be overturned. was lost – finance emerged as the dominant function – and GM became paralyzed by what had once made it great. By the end of the 1960s the delicate balance. Besides. the deficiencies of Sloan’s model gradually became apparent. which Sloan had brilliantly maintained between centralization and decentralization. he always attended personnel meetings. say Bartlett and Ghoshal. The merits or otherwise of Sloan’s approach have long been debated. established businesses.
. it proved incapable of creating and developing new businesses internally. small new ventures. While it did this quite well. The most thoughtful and comprehensive commentary comes from Sumantra Ghoshal and Christopher Bartlett who have pointed to the inward-looking nature of Sloan’s approach as one of its major drawbacks. which eventually became unwieldy. more and more committees were set up. though he was prepared to miss policy meetings. As time went by. at least for a while. Sloan
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amount of his own time in selecting the right people for the job – Sloan personally selected every GM executive from managers to master mechanics and.Alfred P. This inability to manage organic expansion into new areas was caused by many factors. With primarily operating responsibilities and guided by a measurement system that focused on profit and market share performance in served markets. The decentralized structure built up by Sloan revolved around a reporting and committee infrastructure. ‘Sloan’s organization was designed to overcome the limitations of the functional structure in managing large. was handicapped by having ‘no process through which institutionalized wisdoms can be challenged. as organic developments tended to be at the start of their lives.

New York. 23 September 1996. Kathleen. 10 June 1995.. at least in part. ‘The changing nature of leadership’. Concept of the Corporation. mechanisms and processes for allocation of resources. these companies gradually become immobilized by conventional wisdoms that have ossified as sacred cows. from sticking to this past success formula well beyond the limit of its usefulness. technological and competitive contexts has rendered this doctrine obsolete and the problems large corporations are facing stem. They describe the multi-divisional approach as a ‘doctrine – it is more than a mere specification of the organization structure: it also describes the roles and responsibilities of corporate.’
Notes
1 2 3 Kerry. Over the last ten years. John Day. New York. Doubleday.
. divisional and business unit level managers. Peter F. and become constrained by outmoded knowledge and expertise that are out of touch with their rapidly changing realities’. in general. a variety of changes in market. 1963. and. 1972. “the rules of the game” inside the company. Drucker.The Ultimate Business Guru Book
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In the absence of this challenge. The Economist.
Bibliography
My Years with General Motors. Business Week. ‘GM warms up the branding iron’. relative status and norms of behavior of staff and line functionaries.

Taylor American engineer and inventor 1856–1917
Breakthrough ideas
Scientific Management
Key book
The Principles of Scientific Management
.” Frederick W.Frederick W Taylor
“Hardly a competent workman can be found who does not devote a considerable amount of time to studying just how slowly he can work and still convince his employer that he is going at a good pace.

where he became chief engineer. the champion of measurement and of control. was the patron saint of mass production. the inventor of what was known as Scientific Management. His family were affluent. He was also a tennis champion.) While working and studying. or regarded in a negative light. The Principles of Scientific Management. While a teenager he undertook the classic European tour. Morton aimed to upgrade mechanical engineering and emphasized a broad-based curriculum that fitted Taylor’s wide range of skills. though he passed the entrance examination. Henry Morton.The Ultimate Business Guru Book
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Frederick Taylor (1856–1917) had a profound effect on the working world of the twentieth century and was a man of amazing versatility and brilliance. This was painfully simple. Taylor laid out his route to improved performance:
. It was no whistle stop breeze through the continent – Taylor’s tour lasted three years. Taylor attended the Stevens Institute of Technology in Hoboken. He changed the rules of baseball so that pitchers threw overarm rather than underarm and took out over 100 patents for his many and varied ideas. Taylor apprenticed himself to a Philadelphia maker of steam pumps. Taylor was the first and purest believer in command and control. In 1893 he moved to New York and began business as a consulting engineer (the forerunner of the management consultant). And yet. and from there to become general manager of the Manufacturing Investment Company’s paper mills in Maine. Frederick Winslow Taylor grew up in Philadelphia. Taylor came up with a seemingly endless series of inventions and innovations. (He didn’t go to Harvard because of impaired eyesight. Stevens was a recently established engineering institute then under its first president. Taylor.) His next career move was to the Midvale Steel Company. At the core of Taylor’s view of the working world was his theory of how working life could be made more productive and efficient. New Jersey. the rich man who believed he knew and understood life on the production line better than anyone. In his 1911 book. his name is either not known. (Henry Gantt – creator of the Gantt chart – graduated from Stevens a year after Taylor. the Enterprise Hydraulic Works. and back at home. Taylor graduated in 1883. Aged eighteen.

definite instructions as to just what he is to do and how he is to do it. ‘2. ‘In its essence. Study the exact series of elementary operations or motions which each of these men uses in doing the work being investigated. Study with a stopwatch the time required to make each of these elementary movements and then select the quickest way of doing each element of the work. ‘5. 65–
. Collect into one series the quickest and best movements as well as the best implements.’ said Taylor with typical frankness. The man most associated with the application of Scientific Management was Henry Ford (though this is a simplistic reading of Ford’s contribution – see pp. Employees had to be told the optimum way to do a job and then they had to do it. whether they are right or wrong’.Frederick W. Taylor
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‘1. and toward their employees. ‘Brutally speaking. Taylor advised. Not surprisingly this did not always go down well – in 1911 the introduction of Taylor’s methods caused a strike at a munitions factory run by the army. say. ‘Each employee should receive every day clear-cut. slow movements and useless movements. Find. Taylor could determine the optimum time required to complete a task. Motivation came in the form of piece work. scientific management involves a complete mental revolution on the part of the working man engaged in any particular establishment or industry – a complete mental revolution on the part of these men as to their duties toward their work. ‘4. ‘3. Armed with this information. 10 or 15 different men (preferably in as many separate establishments and different parts of the country) who are especially skillful in doing the particular work analyzed.’ This minute examination of individual tasks became known as Scientific Management. The humble employee was regarded as a robotic automaton.’ Taylor wrote. toward their fellow men. and these instructions should be exactly carried out. Having identified every single movement and action involved in doing something. the manager could determine whether a person was doing the job well. Eliminate all false movements. We do not care for his initiative. as well as the implements each man uses. our scheme does not ask any initiative in a man.

One book about him noted: ‘Taylor’s personality emerges with great clarity from his writings. this was the logical conclusion of Scientific Management. Taylor practised what he preached and applied his theories to every aspect of his own life. . 2. even his afternoon stroll was not a casual affair but something to be carefully planned and rigidly followed. A Japanese engineer translated The Principles of Scientific Management (in Japan it became Secrets for Eliminating Futile Work and Increasing Production). one gets the impression of a rigid. a talk by Taylor in New York in 1914 attracted an audience of 693000.The Ultimate Business Guru Book
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8). He calculated that the production of a Model T required 7882 different operations.’1 And yet. Debased though it was. in his home life. . Astonishingly. His virtual obsession to control the environment around him was expressed in everything he did. In his book. all contingencies considered. Scientific management had an effect throughout the world. and steps taken to guard against extraneous developments. Ford gave a chilling insight into the unforgiving logic of Scientific Management. two by armless men. The remainder. his gardening. could be undertaken by ‘women or older children’ and ‘670 could be filled by legless men. insecure personality. something did occur to upset his plans he gave evidence of great internal distress – distress that sometimes expressed itself in blazing anger and sometimes in black brooding . despite all precautions. My Life and Work. Nothing was left to chance if in any way chance could be avoided.637 by one-legged men. Every personal action was thought through carefully. And when. but so were many thousands of ordinary business people.
. Of these 949 required ‘strong. In Japan it was a bestseller – a foretaste of the Japanese willingness to embrace the latest Western thinking. painstaking plans. desperately afraid of the unknown and the unforeseen. Mussolini and Lenin were admirers. able to face the world with reasonable equanimity only if everything possible has been done to keep the world in its place and to guard against anything that might upset his careful. said Ford. and practically physical perfect men’ and 3338 required ‘ordinary physical strength’. there can be no doubting the impact of Taylor’s thinking on a wider audience. able-bodied. 715 by one-armed men and 10 by blind men’. his golfing.

says Stewart.’ says quality guru. but for many decades worked brilliantly’. . Their job was to simply to do their job as delineated by the all-seeing and all-knowing manager. moral or amoral. The fourth step is to say that what can’t be easily measured really doesn’t exist. And yet Taylor’s legacy lives on. management from another time. Armed with their scientifically gathered information. Taylor
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Right or wrong. said Taylor. In the future the system will be first. . Central to this. The decisions of foremen – based on experience and intuition – were no longer considered to be important. ‘The first step is to measure whatever can be easily measured. Obsessive measurement is a slippery slope. It is fashionable to dump on Taylor. managers dictated terms. ‘Despite [the] obsolescence of Taylor’s premises.2 Nowhere is this clearer than in the continuing prevalence of the belief that measurement is the crucial part of a manager’s work. and so it proved. Scientific management elevated the role of managers and negated the role of workers. was the role of managers. Joseph Juran. That is suicide. The genius of the man was to urge that management apply knowledge as well as the lash: take complex work. constant repetition. ‘Taylorism . Taylor’s view of the future of industry was accurate. and find ways to do it simpler. The most obvious and serious of these detriments is the underemployment of the intelligence and creative capacity of millions of human beings. This may appear to be management by dictatorship. Employees were not allowed to have any ideas or sense of responsibility. better. The third step is to presume that what can’t be measured easily really isn’t important. That is OK as far as it goes. ‘The essence of Taylorism isn’t just drudgery. not only worked.’3 A more positive slant on Taylor’s work is provided by Fortune’s Tom Stewart in his book on Intellectual Capital – not a subject one would expect Taylor to feature in.’ says Robert McNamara.Frederick W. with all the detriments inherent in use of a system which is based on obsolete premises. faster. This is blindness. not rule of thumb’. we retain the Taylor system. but
. ‘Science. however. This is artificial and misleading. apply brainpower to it. and narrow job descriptions. ‘In the past the man was first.’ he said. ‘The second step is to disregard that which can’t be easily measured or to give it an arbitrary quantitative value.

Stuart. New Jersey. pioneering insights’ Peter Drucker identified its weak points in The Practice of Management: ‘Scientific Management. His plan covers the next 180 years and could potentially amount to an $8. not just in terms of productivity but also in terms of the dignity of labor.
Notes
1 2 3 4 J. Big Business and Free Men. While acknowledging Scientific Management as ‘one of the great liberating. His contribution was significant as it encouraged thinkers to consider the nature of work and how best to manage people and resources. For the first time. they are not separate jobs’. Stewart’s point that Taylor was a creature of his times is worth remembering. said Drucker.
. While Taylor’s concepts are now usually regarded in a negative light. pp.The Ultimate Business Guru Book
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important to remember that Scientific Management was a great leap forward. Juran. Joseph. New York. Intellectual Capital. Capstone. one engineering and one philosophical. 74–5. To confuse the two is grossly unscientific. despite all its worldly success. Quoted in Crainer. Stewart. Oxford. received around $ 10 million from Taylor’s sizeable estate.C.6 billion endowment. 1997. the Stevens Institute of Technology in Hoboken. London. 1997.5 That Taylorism lives on is undoubted. The Ultimate Book of Business Quotations. Taylor specified how much of the income from share dividends could be reinvested. Indeed. ‘The Taylor system and quality control’. Thomas.’ Drucker argued that the engineering defect is that ‘to take apart and to put together are different things. thinkers began to give serious consideration to work. Worthy. Nicholas Brealey. was to fail to recognize that ‘planning and doing are separate parts of the same job.’ The other blemish. It has two blind spots. Harper & Row. Taylor had stipulated how the Institute was to invest the money. After the death of his heirs. its insight is only half an insight. In keeping with his principles. As so often happens in the history of ideas. the originality of his insights and their importance are in little doubt.’4 While it is difficult to accept that Taylor enhanced the ‘dignity of labor’. has not succeeded in solving the problem of managing worker and work. 1959.

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and space you need in the warehouse. You reduce the amount of labor. capital. and none of the powers that be in Washington and in the industrial centers of our country seem yet to fully comprehend it. It scares them. raw materials.” Alvin Toffler American futurist Born 1928
Breakthrough ideas
Adhocracy Post-industrialization
Key books
Future Shock The Third Wave Powershift
. energy. it’s the factor of production. you can substitute it for all the other facts of production. So knowledge is not only a factor of production. It’s threatening.Alvin Toffler
“If you have the right knowledge.

His work has often been prophetic and is always interesting. but he all but invented the business of futurology. scenarios and predictions.) Some of the ideas were signposted in a 1965 article. Toffler’s journalistic career evolved slowly. and worked in factories. He then became a Washington correspondent for a Pennsylvania newspaper and an associate editor of Fortune before spending time as a Visiting Professor at Cornell University. ‘I was your typical liberal arts student. This sounded sensational to many readers’. Heidi – studied English at New York University.2 It also sounded laughable to many others. After decades of assembling carefully constructed hierarchies and ornate bureaucracies. Toffler regarded the term future shock ‘as an analogy to the concept of culture shock. I knew at a very young age that technology was important and science was important. remains the world’s best known purveyor of trends. (Virtually every other Washington correspondent comes to the same conclusion. Toffler. Most do not go on to consider how things should be changed. Math and science were absolutely the subjects that gave me the most difficulty. Toffler wrote poetry. The book’s origins lay in Toffler’s time in Washington where he came to the conclusion that the political systems were hopelessly outdated. outlined prospective novels. ‘The future as a way of life’. companies saw no reason to dismantle them.’1 When not discovering the world of science. Toffler’s first high impact work was the 1970 book. ‘Future Shock suggested that businesses were going to restructure themselves repeatedly’. a Visiting Scholar at the Russell Sage Foundation and teaching at the New School for Social Research. With future shock you stay in one place but your own culture changes so rapidly that it has the same
. Future Shock (1970). and so I took a course in the history of technology and then read. ‘That they would have to reduce hierarchy and [adopt] what we termed ad-hocracy. read and read. helped along by a commission from IBM to write a report on the long-term social and organizational implications of the computer.The Ultimate Business Guru Book
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Alvin Toffler (born 1928) may not have invented the future. which suggested that accelerating change and uncertainty were going to be characteristics of the future. Toffler – who works alongside his wife. But for some reason. says Toffler. along with John Naisbitt.

too disembodied to be real. The leisure age failed to materialize. he was not taken in by the burgeoning overconfidence of the time. We now work harder in more insecure jobs. The oil crisis of the 1970s was yet to happen. psychological. instead of being imprisoned. In 1970 corporate American was at the height of its powers. Toffler’s vision of the future was greatly different from those of other crystal-ball gazers. Toffler preached insecurity and humility. The coming word-quake means more than just new machines. It promises to restructure all the human relationships and roles in the office as well. too smooth. ‘The image of the office of the future is too neat.’ Toffler differed from mainstream thought in a number of other ways.3 Toffler’s theorizing came as a rude awakening to many readers. These two themes are constant throughout his work. How wrong they were. We would work less and play more. and economic consequences. It did so in capitalist and socialist countries alike.Alvin Toffler
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disorienting effect as going to another culture’. His starting point was that things needed to change dramatically. In this. Toffler correctly anticipated that technology would enable us to work differently rather than doing away with work altogether – ‘Machine synchronization shackled the human to the machine’s capabilities and imprisoned all of social life in a common frame. as machine synchronization grows more precise. At a time of security and arrogance.
. The future he envisaged was driven by technology and knowledge. The second crucial area of difference was that Toffler had a keen awareness of the technological potential. No utopian idealist. First. economists mapped what would happen decades into the future with apparent confidence. corporate giants appeared to have achieved immortality. are progressively freed. humans. But it is clear that we are rapidly on our way. After the decades of wealth creation and rising standards of living. Now.’ he later wrote in The Third Wave. Toffler’s future was grounded in reality rather than flights of fancy. and even a partial shift towards the electronic office will be enough to trigger an eruption of social. The mainstream futurists of the early 1970s predicted a leisure age. this seemed the inevitable result. Reality is always messy.

’ he wrote. This notion of mass customization has since been picked up by a wide variety of thinkers and. His books appear every ten years and map out the technological leaps necessary for survival in the next ten years – The Third Wave appeared in 1980 and Powershift in 1990. demands wholly new ideas and analogies. ‘Old ways of thinking. old formulas. ‘The world that is fast emerging from the clash of new values and technologies. is already in existence. Toffler ushered in the new technological era and bade farewell to the Second Wave of industrialization. He envisaged the office of the future: ‘The ultimate beauty of the electronic office lies not merely in the steps saved by a secretary in typing and correcting letters. Toffler wrote.The Ultimate Business Guru Book
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Toffler’s subsequent work has simply added emphasis to his early arguments. Toffler’s latest work is (the premature) War and Anti-War (1993) which argues that ‘as new civilizations emerge they bring with them new forms of warfare and as new forms of warfare emerge. While others looked at the impact of technology or the impact of increased amounts of information. It faces the deepest social upheaval and creative restructuring of all time. This is the meaning of the Third Wave. From a technological perspective. the essence of Third Wave manufacture is the short run of partially or completely customized products. Toffler had to explain what a word processor is – and mentioned its alternative labels. no longer fit the facts’. Toffler sought out a panoramic view. Without clearly recognizing it. By contrast. in some areas. new forms of peacefare are required’.’ wrote Toffler. new geopolitical relationships. ‘the smart typewriter’ or ‘text editor’. for example. Toffler has been amazingly accurate in his predictions. ‘The essence of Second Wave manufacture was the long “run” of millions of identical standardized products. we are engaged in building a remarkable new civilization from the ground up. classifications and concepts. and ideologies. In 1980. Toffler’s argument of the 1980s was encapsulated in The Third Wave. dogmas. ‘Humanity faces a quantum leap forward. no matter how cherished or how useful in the past. Such has been the pace of change that Toffler can appear to have understated the likely technological leaps. The automated office can file them in the form
. new lifestyles and modes of communication.’ ‘The death of industrialism and the rise of a new civilization’ meant mass customization rather than mass production.

What happened was. within organizations and within countries and regions. an enormous bank of skills was distributed through our society. through an informal process of people-to-people learning. civil groups and political lobbies. That says to me.’4 Toffler has also gone on to explore the wider implications of such changes. With the machines hooked up to one another and to the phone lines. to the vast majority of Toffler’s readers. according to Toffler’s perspective). universities. It can (or soon will) pass them through an electronic dictionary that will automatically correct their spelling errors.
•
•
. Virtually none.’ In 1980.Alvin Toffler
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of electronic bits on tape or disc. this read like science fiction. we could transform and accelerate the learning processes in fabulous ways that have nothing to do with schoolrooms and seats. will be a ‘multipurpose institution’. driven to redefine itself through five forces: • • Changes in the physical environment – companies are having to undertake greater responsibility for the effect of their operations on the environment. No school. if we understood people-to-people learning. Changes in government organization – the profusion of government bodies means that the business and political worlds interact to a far greater degree than ever before. Just a few years later it was reality for many in the industrialized world (or deindustrialized world. by necessity impacts on the informational environment exactly as it impacts on the physical and social environment’. he reflected: ‘The single. Changes in the role of information –’As information becomes central to production. In a 1996 interview. The company of the future. . he predicts. 30 or 40 million Americans have learned to use a PC . as “information managers” proliferate in industry. . most important educational gain in America in the last 15 or 20 years has been the fact that 20. writes Toffler. the secretary can instantly transmit the letter to its recipient’s printer or screen. the corporation. Changes in the ‘line-up of social forces’ – the actions of companies now have greater impact with those of other organizations such as schools. Schools didn’t matter in that process. and distributed intelligence.

When the first and the second wave collided we had civil wars. The ticking bomb underneath the Western world continues to tin ‘All the social institutions designed for the second wave – for a mass production. the family system. industrialism and post-industrialism. 19 March 1994. forced migrations. Rethinking the Future. 1997. 19 March 1994. One of the things we ought to learn from history is that when waves of change collide they create countercurrents. New Scientist. All of them. Rowan (editor).The Ultimate Business Guru Book •
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Changes in morality – the ethics and values of organizations are becoming more closely linked to those of society. This. mass media. is the ‘de-massifying’ of our culture. various ecological systems – along with our value and epistemological systems. In many ways. the transportation system. moral.
. ‘Alvin Toffler: still shocking after all these years’. ‘Behavior once accepted as normal is suddenly reinterpreted as corrupt. the education system. Toffler’s perspective became even broader with the 1990 book. London. Gibson.’
The organization of the future. will be concerned with ecological. political. sexual and social problems.’ he says. in one of his ungainly phrases. ‘And the emerging third-wave civilization is going to collide headon with the old first and second civilizations.’5
Notes
1 2 3 ‘Alvin Toffler: still shocking after all these years’. Toffler has come full circle. says Toffler. ‘The corporation is increasingly seen as a producer of moral effects. as well as traditional commercial ones. In this he accurately predicted the growth of regionalism and the profusion of local media. Nicholas Brealey. racial. Toffler envisages. mass society –are in crisis. The master conflict of the 21st century will not be between cultures but between the three supercivilizations – between agrarianism. The health system. immoral or scandalous’. New Scientist. upheavals. Powershift. political revolutions. The limitations of the institutions that ignited his interest in the 1960s largely remain.

Robert Townsend
“Big companies are small companies that succeeded.” Robert Townsend American executive Born 1920

Breakthrough ideas
Debunking corporate life

Key book
Up the Organization

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Born in 1920, Robert Townsend did all the right things to become corporate man. He was highly educated – at B Princeton and Columbia – and held a number of important executive positions. He was partner in charge of research at Hass & Company and spent 13 years as director of American Express. Townsend joined Avis Rent-a-Car in 1962 and was the company’s President until it was absorbed into the ITT empire. This experience equipped him wonderfully for a career change. The straight exec, Robert Townsend transformed himself into a witty commentator on the excesses of corporate life. The new model Townsend first appeared with the bestseller Up the Organization (1970), sub-titled ‘How to stop the corporation from stifling people and strangling profits’. The British management writer Robert Heller called the book ‘the first pop bestseller on business management’ which ‘owed much of its success to Townsend’s derisive title’. There was also a hilariously funny book behind the title page. Its sequel was Further Up the Organization (1984); and, most recently, Townsend has written The B2 Chronicles (1997) which recounts the story of a company called QuoVadoTron and includes characters such as Crunch, Dooley and Archibald. Townsend has not returned to corporate life and now ‘divides his time between books, boats and family’ and undertakes a little consultancy work. There is a degree of irony in Townsend pursuing a consultancy sideline as his quip on consultants – ‘They are the people who borrow your watch to tell you what time it is and then walk off with it’ – remains one of the most quoted put-downs of an entire industry. Townsend’s genius lies in debunking the modern organization for its excess, stupidity and absurdity. He is also acutely aware of the boredom of the corporation. ‘In the average company the boys in the mailroom, the president, the vicepresidents, and the girls in the steno pool have three things in common: they are docile, they are bored, and they are dull’, observes Townsend. ‘Trapped in the pigeonholes of organization charts, they’ve been made slaves to the rules of private and public hierarchies that run mindlessly on and on because nobody can change them.’

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Townsend is the ultimate skeptic. Those with power, or who think they have power, are dangerous beings. ‘The sin of hubris is inevitably and inexorably followed by Nemesis,’ warns Townsend. He is, by turn, playful, indignant, critical and practical. ‘A personnel man with his arm around an employee is like a treasurer with his hand in the till’, he notes. Commonsensical aphorisms speckle his prose. There is a serious side to Townsend. ‘There’s nothing fundamentally wrong with our country except that the leaders of all our major organizations are operating on the wrong assumptions’, he writes. ‘We’re in this mess because for the last two hundred years we’ve been using the Catholic Church and Caesar’s legions as our patterns for creating organizations, And until the last forty or fifty years it made sense. The average churchgoer, soldier, and factory worker was uneducated and dependent on orders from above. And authority carried considerable weight because disobedience brought the death penalty or its equivalent.’ His greatest vehemence is reserved for Harvard Business School – ‘Don’t hire Harvard Business School graduates’, he advises. ‘This elite, in my opinion, is missing some pretty fundamental requirements for success: humility; respect for people on the firing line; deep understanding of the nature of the business and the kind of people who can enjoy themselves making it prosper; respect from way down the line; a demonstrated record of guts, industry, loyalty down, judgment, fairness, and honesty under pressure.’ More useful, if still obtuse, is Townsend’s observation that ‘top management (the board of directors) is supposed to be a tree full of owls – hooting when management heads into the wrong part of the forest. I’m still unpersuaded they even know where the forest is.’ Townsend has no time for the adornments of executive office and his list of ‘nonos’ includes: reserved parking spaces; special-quality stationery for the boss and his elite; muzak; bells and buzzers; company shrinks; outside directorships and trusteeships for the chief executive (‘Give up all those non-jobs. You can’t even run your own company, dummy’); and the company plane. He is, in fact, preaching a brand of empowerment and participation that was 20 years ahead of its time. Humorous it may be but, as with all great humor, there is a serious undercurrent.

Fons Trompenaars
“The international manager needs to go beyond awareness of cultural differences. He or she needs to respect these differences and take advantage of diversity through reconciling cross-cultural dilemmas.” Fons Trompenaars Dutch consultant and researcher Born 1952
Breakthrough ideas
Managing globalization Cultural issues
Key book
Riding the Waves of Culture
. The international manager reconciles cultural dilemmas.

. he explains with characteristics gusto. Not for Trompenaars the world of miniatures. ‘I became interested in management and culture. How do we think? How do we behave in certain situations? How does that affect the way we manage businesses? And what are the skills essential to managing globally? ‘Basic to understanding other cultures is the awareness that culture is a series of rules and methods that a society has evolved to deal with the recurring problems it faces’. like breathing. dilemmas in relationship to time. People wandered what it was.The Ultimate Business Guru Book
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While other management thinkers rant and rave about the intricacies of strategic management and marketing. Brought up by a Dutch father and a French mother. says Trompenaars. Culture is the way in which people resolve dilemmas emerging from universal problems. Fred Emery and Stafford Beer who was a guest lecturer. Fons Trompenaars (born 1952) paints on a larger canvas. we specialized in brilliant questions with no answers’. practice and potential of cross-cultural life go back to Trompenaars’ childhood. Dutch consultant and author. we no longer think about how we approach or resolve them.’ The roots of his interest in the perils. he later studied at top American business school Wharton. Prior to arriving at Wharton in 1979. a more academic form of the MBA.’ he recalls.’ Among the other luminaries Trompenaars encountered at Wharton were Eric Trist. and dilemmas in relations between people and the natural environment. ‘Wharton had a fantastic program on social systems. The first articles by Hofstede were beginning to appear. I am still excited by that period. ‘It was the foundation of my thinking. ‘They have become so basic that. Trompenaars received a Dutch masters in business economics. Andre Laurent and Geert Hofstede. Every country and every organization faces dilemmas in relationships with people. His subject is the universal one of cultural diversity. which played a part in convincing him that the American management model was neither perfect nor universally applicable. ‘While MBAs give brilliant answers to the wrong questions. I met people like Russ Ackoff.1 Trompenaars’ studies at Wharton were funded by a one-year scholarship from the EEC which involved negotiating a heavyweight interviewing panel of the late Gunnar Hedlund. At the time there was nothing in the field.

Trompenaars continues to have a troubled relationship with the American business world. says Trompenaars. Trompenaars’ book. He spent three years with Shell.’ says Trompenaars. I had been to Wharton. Riding the Waves of Culture. rather than to do with different cultures. Peters noted: ‘What’s not okay is cultural arrogance. but he secured sponsorship from Shell for a further three years. The idea was that after a year he would return to Holland as an academic.’ Undeterred by such hype and hyperbole. They didn’t care less about Wharton. Shell gave Trompenaars complete freedom and. He then worked part-time for the company before founding the Center for International Business Studies. was published in 1993. he received his PhD and joined the oil giant. He is still dismissive of the American (or any other) managerial model –’It is my belief that you can never understand other
. Now in his mid-forties. Calling it a masterpiece. he has his American fans – Tom Peters was an enthusiastic reviewer of Riding the Waves of Culture. which tends to regard his work as concerned with diversity.’ Others remain suspicious and leap to defend the American approach.Fons Trompenaars
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I got sucked into the program. That means keeping a beginner’s mind in perpetuity is a must for successful – and less stressful – dealings throughout the emergent global village.’ says Trompenaars. but Shell treated me like any other graduate. its sales have increased each quarter ever since publication. racial and sexual. in 1982. Trompenaars remains more cosmopolitan man than corporate man. finishing up working on a culture change project. I think Trompenaars is correct when he says we’ll never master anybody else’s culture. Trompenaars is now developing his research and ideas further through the Trompenaars–Hampden-Turner Group. Even so. Indeed. ‘When I wrote the book I wrote it for myself’. Gary Hamel has acerbically issued a challenge: ‘Funny how American companies are out-competing their European competitors in Asia and Latin America. ‘I was enormously arrogant. It is one of those slow-burning bestsellers. If you come to another’s turf with sensitivity and open ears – what the Zen teachers call beginner’s mind – you’re halfway home. Name any region of the world that looks to Europe for its managerial inspiration.

Typically. in Trompenaars’ eyes.’ says Trompenaars. ‘I love research but wouldn’t survive if that was all I did. There is now a tendency to be too theoretical so it is the transformation into what managers can use that is important.The Ultimate Business Guru Book
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cultures. (Trompenaars points out that Americans are adept at reconciling cultural differences – teamworking. His books are based around exhaustive and meticulous research. he says. or indeed in the rest of the world. The Trompenaars database is a large and impressive beast – his latest book emerged from a 58-item questionnaire among 34. ‘Management is beyond simple rationalization’. ‘Globalization is just starting and people are realizing its implications’.’ says Trompenaars. More successful companies are those which reconcile more effectively. in his earlier work Trompenaars presented a number of fundamentally different cultural perspectives while acknowledging that within a
. Riding the Waves of Culture drew from over 900 seminars. ‘The essence of what I do is the transformation of fairly complex models into an appealing. ‘Our hypothesis is that those societies that can reconcile better are better at creating wealth. how international managers reconcile differences is the very essence of their job. is highly important in American companies. (The corollary of this is that anyone who simplifies or rationalizes the world of business is an impostor. presented in 18 countries. matches the complexity of the subject. As a result. it is easy to make such statements while managing in the global environment – even for Trompenaars’ most fervent of disciples – remains wrought with difficulty.’ The complexity of the research simply. communities and societies is through reconciliation. This produced two million responses. at the heart of Trompenaars’ research is a relatively simple proposition: the only positive route forward for individuals. practical setting.) To the ethereal world of culture.’ The answer he provides is simply that they do not. Trompenaars has brought enthusiastic vigor.) For all the nationalistic nerves it touches. he says. organizations. As a key to the complexity. Of course. I started wondering if any of the American management techniques I was brainwashed with in eight years of the best business education money could buy would apply in the Netherlands. where I came from. they get on with each other. The rich don’t get even.000 middle and senior managers from some 58 countries. for example.

a set of rules that applies in any setting. Trompenaars examined the extremes by way of archetypal situations. The cultural imponderables and wide range of basic differences in how different cultures perceive the world provides a daunting picture of the world riddled with potential pitfalls. says Trompenaars. Mastering the Infinite Game. It is important to particularists. are more intent on protecting their shins than blundering through darkened rooms.Fons Trompenaars
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country attachment to any given cultural trait varies widely. Honing in on the great imponderables is Trompenaars’ latest book. written with long-term collaborator. Universalists doing business with particularists should. it seems. Universalists (including Americans. Particularists (South Koreans. Most managers. Chinese and Malaysians) focus on the peculiar nature of any given situation. You are the only witness. he presented the following dilemma: You are in a car with a close friend who has an accident in which a third party is injured. Particularists doing business with universalists should ‘be prepared for rational and professional arguments and presentations’.) Such results allow Trompenaars to provide advice on how business dealings between the two parties might work. moreover. ‘be prepared for meandering or irrelevancies that do not seem to be going anywhere’. 74 percent of South Koreans would assist their friend and lie. Charles Hampden-Turner of
. The first of these intriguing pairings is the conflict between what Trompenaars labels the ‘universalist’ and the ‘particularist’. we should not ‘take get to know you chatter as small talk’. universalists won’t lie for their friend while particularists will. The universalist becomes even more adherent to the rules while the particularist’s sense of obligation grows. a readiness to enter a room in the dark and stumble over unfamiliar furniture until the pain in our shins reminds us of where things are’. In such a situation. Australians and the Swiss) advocate ‘one best way’. compared to just five percent of Americans. ‘We need a certain amount of humility and a sense of humor to discover cultures other than our own. In the universalist–particularist conflict. Canadians. for example. (In this example. and he asks you to testify falsely about his driving speed. The difference becomes even more pronounced if the injury is severe.

1994. London. November 1997 (as are all other quotes unless otherwise stated). Mastering the Infinite Game (with Charles Hampden-Turner). Not surprisingly. their argument remains the same: reconciling different values is key to success – and it is something that Eastern cultures have proved marvelously adept at achieving. The Seven Cultures of Capitalism (with Charles Hampden-Turner). Instead.
Notes
1 Interview with the author. Trompenaars and Hampden-Turner identify fundamental differences in Western and Eastern values. Piatkus. the East Asians are playing an Infinite Game ‘with rules which are adapted by the exceptions they encounter.
. While the East settles the difference. Hampden-Turner was also coauthor of the 1994 book The Seven Cultures of Capitalism and is now credited as coauthor of Riding the Waves of Culture. London. 1993.The Ultimate Business Guru Book
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Cambridge’s Judge Institute of Management Studies. The duo argue that the massive and dramatic success of the East Asian ‘tiger economies’ can be attributed to ‘seven major integrations’. 1997. It is a cultural imponderable that is enough to make even Fons Trompenaars despair. Oxford. In contrast. Capstone. success is good opposes the belief that the good should succeed. winning is opposed by negotiating consensus. the West remains obsessed with splitting the difference. Nicholas Brealey. The West believes in rule by laws (universalism) while the East believes in unique and exceptional circumstances (particularist). Central to these are cultural differences which mean that the lost managerial souls of the West find themselves ‘playing Finite Games in which individuals win or lose by specific criteria in universal contests’. But that is not their argument. The differences between West and East have been much debated and there is little to disagree about in Trompenaars and Hampden-Turner’s list.
Bibliography
Riding the Waves of Culture (with Charles Hampden-Turner). with contests from which all players learn co-operatively’.

Kenichi Ohmae charted the Japanese takeon strategy. Sun Wu. The third impetus to Sun-Tzu’s comeback was Michael Porter’s work on competitive advantage. Strategy and competitive advantage also became fashionable. MacArthur. First. Military role models – whether they are Napoleon. the organization as machine (see the sections on Frederick Taylor and Max Weber for its inspiration). as far as it is possible to discern. This remains a powerful image. Japanese companies appeared to be staging a relentless onslaught. Business is war. BH Liddell-Hart’s Strategy (1967) and Miyamoto Mushashi’s A Book of Five Rings (1974) have explored the link. a military general who was alive around 500 BC. Von Clausewitz’s On War (1908). The second regards competition as war. is Sun-Tzus The Art of War written 2500 years ago. Montgomery. Its return to popularity can be attributed to a number of reasons. Western industry felt itself under siege. is alluring and the link between the military and business worlds has existed since time immemorial. The book returned to grace bookshelves in the 1980s. The military. Second.The Ultimate Business Guru Book
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Managerial metaphors are sadly uninspired but have usually proved long lasting. while Pascale and Athos examined the Japanese art of management. argued his case for military discipline by decapitating two of the King’s concubines. perhaps understandably. Two metaphors spring to mind as archetypes of the industrial age. The authorship of The Art of War remains. This proved his point admirably. not having a flip chart available. It may have been written by Sun Wu. Its starting point. The book’s actual title is Sun Tzu Ping Fa which can be literally translated as ‘The military method of venerable Mr Sun’. Colin Powell or Norman Schwarzkopf – are keenly seized upon by executives. Warfare seemed a more appropriate metaphor than ever before. First. with its elements of strategy and leadership. Reading Sun-Tzu was a great deal easier on the mind
. clouded in mystery. At a sales conference somewhere in the world. His book is reputed to have led to a meeting between Sun Wu and King Ho-lü of Wu. there was a rise in interest in Eastern managerial models and thinking. obliterating the competition. a CEO is talking about outflanking the competition. The East was fashionable. Books as diverse as Carl.

‘The shape of water is to avoid heights and flow towards low places. then seize what they love. Deeply investigate the true situation. however. Sun-Tzu is an aggressive counterpoint to the confusion of mere theory. After all. the world appears clearer if you are a military general or a managing director. Why destroy when you can win by stealth and cunning?.’ wrote Sun-Tzu ‘To subdue the enemy’s forces without fighting is the summit of skill. Simple really.Sun-Tzu
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than coming to terms with Michael Porter. ‘For the shape of an army is like that of water’. . next best is to attack his alliances. Michael Porter never made it that simple. a nation that has been destroyed cannot be restored. If you are far from the enemy. The attraction of the military analogy is that it is clear who your enemy is. Confucian analogies appear to be anathema to hard headed modern executives. said Sun Tzu. Often.’ The final attraction of Sun-Tzu was that managers were drawn to Zen-like aphorisms. ‘Advance knowledge cannot be gained from ghosts and spirits . next best is to attack his soldiers. Yet The Art of War is more sophisticated than that. ‘If you are near the enemy. among his advice was the following: ‘Deploy forces to defend the strategic points. nor can the dead be brought back to life. nor should a general give battle out of rage. When your enemy is clear. make him believe you are near. they appear to find them reassuring.’ Sun-Tzu also offered sound advice on knowing your markets. The best approach is to attack the other side’s strategy. ‘A sovereign should not start a war out of anger. but must be obtained from people who know the enemy situation. exercise vigilance in preparation. Wait until they leave their strongholds. . do not be indolent. For while anger can revert to happiness and rage to delight. Kill or be killed appealed to executive machismo in a way the five forces framework failed to do. And this was how Sun-Tzu was (and continues to be) generally regarded. secretly await their laxity. the shape of the army is to avoid strength and to
.’ Managers lapped up such brazen brutality.’ wrote the master. make him believe you are far from him. Sun-Tzu is filed under means of destroying competition and sending them to oblivion. In the same way as Machiavelli is pigeonholed under helpful hints on amoral leadership. the worst is to attack cities.

’ Quite how this might help you manage a ball bearing maker in Illinois more effectively is difficult to imagine. This all sounds very modern and profound. While the imagery of warfare continues to exert influence over managers. they risk extinction. Moore says that the creation of business ‘ecosystems’ is a matter of evolution rather than revolution – ‘Life arrives only through spectacular stamina. For example. But is it a million miles away from much of the wisdom of Sun-Tzu? I doubt it. Griffith). managers need to understand how their ecosystem works’. 1963. it appears to be on the wane. American consultant lames Moore argues that ‘in guiding their companies from one era to the next.
Bibliography
The Art of War (transl. To view the business world in this way is daunting.
. Oxford University Press. What is important in his metaphor is that ecosystems rely on rich. patience and luck’. Contemporary business metaphors are as likely to emerge from biology and the environment as from the traditional sources of engineering and warfare. but provides an opportunity. The message is that innovation must be attuned to the ecosystem if it is to succeed. If they fail to do so. It is only by being constantly aware of the nuances of their environment that companies can survive. Water flows in accordance with the ground. Companies must anticipate the next stage in the development of their ecosystem. complex and constantly changing systems of mutual reliance and benefit. an army achieves victory in accordance with the enemy. Otherwise they will quickly become corporate dodos. Moore suggests that products that fail because they are too late or too early for the marketplace have probably done so because they are not ‘sensitive to the current state of capability building within an ecosystem’.The Ultimate Business Guru Book
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strike at weakness. Oxford.

Thomas Watson Jr
“I believe that the real difference between success and failure in a corporation can very often be traced to the question of how well the organization brings out the great energies and talents of its people. What does it do to help these people find common cause with each other? And how can it sustain this common cause and sense of direction through the many changes which take place from one generation to another?” Thomas Watson Jr American executive and diplomat 1914–94
Breakthrough ideas
Corporate culture and values
Key book
A Business and Its Beliefs
.

I fail to understand why we have lost our industry leadership position by letting someone else offer the world’s most powerful computer’. How could a minnow out-innovate a giant? Cray had a quick riposte: ‘It seems Mr Watson has answered his own question. In 1987 Watson was hailed by Fortune as ‘the most successful capitalist in history’. Watson despaired at IBM’s weak response to Seymour Cray’s development of the CDC 6600. he said – but under him IBM was propelled to the forefront of the technological and corporate revolution of the 1960s and 1970s. Watson had a significant role in the shaping of the modern IBM – a company whose trials and tribulations continue to fill the media. Watson invested heavily in the development of System/360 which formed the basis of the company’s success in the 1970s and 1980s. He joined IBM in 1946 and worked as a salesman. In 1965. Whichever interpretation is correct. these were something he himself sometimes questioned.The Ultimate Business Guru Book
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Commentators tend to have mixed feelings about Thomas Watson Jr (1914– 93). Watson’s father. Tabulating.’
. Watson Jr attended Brown University and served in the Air Corps during World War II. To some he was the son who inherited control of a corporate juggernaut and did little to put his own stamp on its destination. said Watson. the redoutable Thomas Watson Sr (1874–1956). ‘Contrasting this modest effort of 34 people including the janitor with our vast development activities. lie in the company’s technological achievements. Most notably.) Watson Jr became chief executive in 1956 and retired in 1970. Watson’s real claim to managerial fame does not. however. To others he was the man who brought IBM into the technological era and who mapped out how values and culture could shape an entire organization. Recording Company. built the industrial colossus IBM from what had previously been the nondescript Computing. Indeed. Watson Jr was always in the shadow of his father – ‘The secret I learned early on from my father was to run scared and never think I had made it’. (At that time the company had just launched its Selective Sequence Electronic Calculator and had revenues of $119 million. He was then US ambassador in Moscow until 1980.

Central to this were the company’s central beliefs (or what would now be called core values). it must be prepared to change everything about itself except beliefs as it moves through corporate life . Watson saw it coming.Thomas Watson Jr
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In terms of management thinking. . I believe that the most important single factor in corporate success is faithful adherence to those beliefs . never change. ‘I’m worried that IBM could become a big. in structures or practices that enabled IBM to pick up the baton. They were the glue that kept a sprawling international operation under control. Watson told Chris Argyris of Harvard in the 1950s when Argyris did some work for the company. but never the basic truths on which the company is based – ‘If an organization is to meet the challenges of a changing world. The three basic beliefs on which IBM was built were: give full consideration to the individual employee. beliefs must always come before policies. These had been established under Watson Sr.’ Whether IBM collapsed because it failed to change or adapt its beliefs to new times is difficult to determine. . inflexible organization which won’t be able to change when the computer business goes through its next shift’. . Next. Then the industry became driven by the vision and strategy of other
. and go the last mile to do things right. practices. Watson saw the future but couldn’t mobilize the corporate culture he did so much to clarify. the corporate culture and the company’s values became all-important. The latter must always be altered if they are seen to violate fundamental beliefs. a man who knew all about customer service long before it was taken up by the gurus. A Business and Its Beliefs (1963). spend a lot of time making customers happy. Watson Jr codified and clarified what IBM stood for – most notably in his book. what IBM stood for was more important than what it made. The only sacred cow in an organization should be its basic philosophy of doing business. while Watson Sr was content to drum the message home. on which it premises all its policies and actions. But. and goals. said Watson. . Watson said that a culture could only be sustained by ‘a sound set of beliefs. Change everything else. Under Watson. his son took it a step further.’ Beliefs. ‘For 20 years IBM was in charge of the transformation agenda in the computer industry.

IBM’s problems are not about implementation but foresight.’ says Gary Hamel.
Bibliography
A Business and its Beliefs.The Ultimate Business Guru Book
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companies. 1963. McGraw Hill.
. New York.

Max Weber
“The organization of offices follows the principle of hierarchy.” Max Weber German sociologist 1864–1920
Breakthrough ideas
Bureaucratic model of organization
Key book
The Theory of Social and Economic Organization
. that is each lower office is under the control and supervision of a higher one.

everyone must be an expert in a fast-paced fashionized world’. was the German sociologist.The Ultimate Business Guru Book
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In his 1992 book. He studied the sociology of religion and in this area he produced his best known work. The Protestant Work Ethic and the Spirit of Capitalism.
. Order and the dull regime of corporate life were dead. Meanwhile. because they refused to experiment recklessly. Tom Peters championed a new form of business organization. His depiction of corporations run by an overbearing bureaucratic machine struck a chord with corporate life in the early part of the century. In terms of management theorizing Max Weber has become something of a bête noir. But. Liberation Management. but Geneen and Ford would have been able to identify them as their kind of organization. just because Weber described bureaucracy does not mean that he approved of it. . ‘We’re all in Milan’s haute couture business and Hollywood’s movie business . Max Weber (1864–1920). After studying legal and economic history. Towards the end of his life. Long live chaos. the law. innovation and experimentation. exciting. free-wheeling. Weber developed his political interests and was on the committee that drafted the constitution of the Weimer Republic in 1918. according to Peters. was anarchic. because their systems and processes were geared to efficiency and nothing else. They succeeded because they were very well organized. Weber was a law Professor at the University of Freiburg and later at the University of Heidelberg. They may not have had Harold Geneen as CEO or been founded by Henry Ford. Weber was multi-talented and spent his life seeking out some understanding of the relationships between science. knowledge and action. the king of scientific rationality. politics. many organizations continued to be highly successful by completely ignoring Peters’ advice. The new organizational reality. the sociological twin of Frederick Taylor. a rigidly constrained corporate culture and structure. he announced with typical bravado. . The original champion of the latter approach. Weber has had a bad press – in the business world at least. In political sociology he examined the relationship between social and economic organizations.

the monocratic variety of bureaucracy – is. Weber dismissed this as a long-term solution – once again Weber was the first to discuss this phenomena and examine its ramifications. No matter what Peters and Waterman say. ‘It is superior to any other form in precision. 2. The final organizational form Weber identified was the traditional model where things were done as they always have been done – such as in family firms in which power is passed down from one generation to the next. In the charismatic model. controls and hierarchies and driven by bureaucracy. Weber termed the ‘rational–legal model’. in the stringency of its discipline. its ruledriven. It thus makes possible a particularly high degree of calculability of results for the heads of the organization and for those acting in relation to it.1 Weber did not dote on bureaucracy. from a purely technical point of view. At the opposite extreme were the ‘charismatic’ model and the ‘traditional’ model. and in its reliability. impersonal form. capable of attaining the highest degree of efficiency and is in this sense formally the most rational known means of carrying our imperative control over human beings’. It was characterized by strict rules. he simply observed what he saw emerging in the fledgling industrial world.’ In The Theory of Social and Economic Organization Weber outlined the ‘structure of authority’ around seven points: 1. in stability. If it was pure efficiency you required there was. was the only way to assure long-term survival’ observed Peters and Waterman in In Search of Excellence. A continuous organization of official functions bound by rules. Instead. said Weber. a single dominant figure ran the organization.
. This. Weber argued that the most efficient form of organization resembled a machine. only one choice: ‘Experience tends universally to show that the purely bureaucratic type of administrative organization – that is. history bears Weber out – an organization built around a single charismatic figure is unsustainable in the long term. He was not the doting type.Max Weber
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Weber ‘pooh-poohed charismatic leadership and doted on bureaucracy. A specified sphere of competence. he said. It is finally superior both in intensive efficiency and in the scope of its operations and is formally capable of application to all kinds of administrative tasks. Weber wrote.

the bureaucratic model as outlined by Weber to a large extent became reality. even in cases where oral discussion is the rule or is even mandatory. it worked. The individual was subsumed under the bureaucratic machine. simply.
6. there is also a complete absence of appropriation of his official position by the incumbent. And. it was a plausible and effective means of doing business. The bureaucratic business world he described was denuded of life and inspiration. . . 7. And yet it largely came to pass.’ Whyte described a world where the organization choked inspiration in the name of efficiency. . So. that the goals of the individual and the goals of the organization will work out to be one and the same. The young men have no cynicism about the “system”. they have an implicit faith that the organization will be as interested in making use of their best qualities as they are themselves. In both cases. . . Look at William Whyte’s 1956 classic. In the rational type it is a matter of principle that the members of the administrative staff should be completely separated from the ownership of the means of production or administration. decisions and rules are formulated and recorded in writing. if their application is to be fully traditional. they can entrust the resolution of their destiny to the organization . Like all great insights. and very little skepticism – they don’t see it as something to be bucked. The rules that regulate the conduct of an office may be technical rules or norms. In the rational type case. ‘The fundamental premise of the new model executive .
.
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5. Administrative acts. with equanimity. It was an undoubtedly narrow way of doing things and one which seems out of step with our times. The Organization Man. .
Modern commentators usually cannot resist the urge to scoff at Weber’s insights. for a while at least.
The organization of offices follows the principle of hierarchy.The Ultimate Business Guru Book 3. look at the success of Scott Adams’ Dilbert. but as something to be co-operated with . and this. and its descriptions of corporate life. the average young man cherishes the idea that his relationship with the organization is to be for keeps. if you wish for further proof. based on the mundanity and regularity of corporate life. in the early part of the twentieth century. Yet. specialized training is necessary. is. 4.

Harper & Row. and Waterman. New York. New York. New York. Tom. The Protestant Ethic and the Spirit of Capitalism.
Bibliography
The Theory of Social and Economic Organization. 1978. Scribner’s. 1947.Max Weber
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Notes
1 Peters. In Search of Excellence.
. University of California Press. Economy and Society. Robert. 1958. 1982. Free Press.

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Russ Ackoff
Russ Ackoff (born 1919) is chairman of INTERACT and Professor Emeritus at Wharton School.’
John Adair
John Adair (born 1934) is a British leadership expert who has had a colorful career working on Arctic trawlers among other things. here is a further collection of thinkers with strong cases for inclusion. He developed the idea of Action Centred Leadership and estimated that half of the performance in teams could be attributed to the individual and the other half to the quality of leadership. He argues that interaction between different functions and individuals should be the driving force of organizations rather than functional separation. Once again the thinkers are organized alphabetically. including Creating the Corporate Future. His doctorate at the same university was in science. Management in Small Doses. By way of recompense. Fons Trompenaars met Ackoff while at Wharton and recalls that ‘He was a guru in the real sense. He is the author or co-author of 19 books. Perhaps some should have been included.Appendix
No such compendium of thinkers could ever claim to be 100 percent foolproof. He emphasized the distinction between managing and leading. There is always room for dissension and discussion. Many others could have been among the 50 thinkers I have featured. Ackoff graduated from the University of Pennsylvania in 1941 in architecture.
. Ackoff’s Fables and The Democratic Corporation. Now everyone is a guru.

He has a degree in English Literature and a Masters in modern drama and worked in publishing. These are regarded as the precursors of today’s computers. Among his current research projects is one on emerging markets. Arnold’s research centres on international marketing issues and he is also the author of The Handbook of Brand Management.The Ultimate Business Guru Book
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David Arnold
The British academic. Taylor went on to utilize the same enthusiasm for measurement to human performance. He produced perhaps the first business bestseller in his study of British factories. Another focuses on customer management and he has also looked at the evolution of international distribution channels. wrote Babbage. David Arnold (born 1956) is an assistant professor at Harvard Business School. Arnold took an MBA and joined the Ashridge faculty – one of the few examples of a gamekeeper turning poacher. he shrewdly noted. On the Economy of Machines and Manufactures (1832). Babbage is best known for his attempts at building two calculating machines – ‘the difference engine’ and the ‘analytical engine’.
Charles Babbage
Charles Babbage (1792–1871) was born in London and became a Professor of Mathematics at Cambridge University (1828–39).
. ‘It is of great importance to know the precise expenses of every process as well as of the wear and tear of machinery which is due to it’. Finding himself fascinated. His work and observations were only a step away from Frederick Taylor’s at the end of the nineteenth century (though there is no evidence that Taylor read Babbage). becoming marketing manager of the UK’s Ashridge Management College. He is also taking over responsibility for the International Marketing Management element of the MBA programme. He later did a doctorate at Harvard and now teaches the core marketing course on the school’s first-year MBA programme and an international marketing course. ‘Errors using inadequate data are much less those using no data at all’.

Bartlett is best known for his work with Sumantra Ghoshal (see p. Within the model.) As part of his work on cybernetics. He later worked in the steel industry as a production controller and an operations research manager. He founded and directed the department of operations research and cybernetics at United Steel. the management of system behavior centers on defining and controlling essential variables. (Cybernetics is simply regarded by Beer as the science of effective organization. 73). decision making and control. a model of effective organizations.
. Elsewhere.Appendix
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Christopher Bartlett
Australian-born. and on integrating and co-ordinating different organizational parts. The Heart of Enterprise (1994). Christopher Bartlett is MBA Class of 1966 Professor of Business Administration at Harvard Business School. Bartlett’s research focuses on corporate transformation and managing companies in a global environment. on developing corporate strategies and planning. He served in the British Army during World War II where he became involved in operations research. and Decision and Control (1994). Bartlett (born 1943) has an economics degree from the University of Queensland and masters and doctorate degrees from Harvard.
Stafford Beer
Stafford Beer (born 1926) studied philosophy at London University. He joined the Harvard faculty in 1979. Beer developed the Viable System Model. Beer has argued that the functions of management are policy making. He previously worked as a McKinsey consultant and as a manager. This identified five functions which all systems need to be viable. His books include Brain of the Firm (second edition 1985). Their books include Managing Across Borders (1989) and The Individualized Corporation (1997).

Julian Birkinshaw
Julian Birkinshaw (born 1964) is an assitant professor at Stockholm School of Economics’ Institute of International Business. in a number of manufacturing companies. Team Roles at Work (1993) and The Coming Shape of Organization (1996). He worked in Paris for the Organization for Economic Co-operation and Development. consultant and academic Meredith Belbin (born 1926) is the doyen of the theory of teamworking.
. He read Classics and Psychology at Cambridge University before becoming a researcher at the Cranfield College of Aeronautics. He identified three ego states that dictated behavior – child. London. His research suggests that top performing units are good at giving knowledge away as well as bringing it in.
Eric Berne
Eric Berne (1910–70) was a Canadian psychiatrist who worked in California. and at Henley Management College. parent and adult – and applied these to group dynamics.The Ultimate Business Guru Book
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Meredith Belbin
The British psychologist. This was the basis for his continuing work on international organizations and how their subsidiaries can sometimes be innovative and entrepreneurial leaders rather than timid corporate followers. Birkinshaw is also researching how network organizations identify and leverage their core competencies. Low performers tend to be good at neither. with the Industrial Training Research Unit at University College. Belbin’s books include Management Teams (1984). His initial research was carried out at the University of Western Ontario where he gained an MBA and a PhD in business administration.

The One Minute Manager (co-authored with Spencer Johnson). The Managerial Grid). ‘to provide theory and practice in effective problem-solving teamwork’. The managerial grid designated various styles of leadership. Blanchard has gone on to write a succession of similar books including Raving Fans. Their most famous innovation was the ‘managerial grid’ (see the 1964 book. Scientific Methods. on customer service. Don Shula. been translated into more than 25 languages and been imitated by a host of others. He is best known for his work with Jane Mouton (see p. but popular. In 1961 they co-founded the company. It showed how a leader could simultaneously maximize both production and peopleoriented methods of management.Appendix
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Robert Blake
Robert Blake (born 1918) is Professor of Social Psychology at the University of Texas at Austin. and Everyone’s A Coach with football coach.
Kenneth Blanchard
Cornell educated. Kenneth Blanchard launched an entirely new business book genre with his 1982 book. It was much ridiculed by academics but bought in huge numbers – it has now sold over seven million copies. and inspire. one that we can all be. He was involved in research at the National Training Laboratories in the 1950s and worked at the Tavistock Clinic in London.
. It identified four extremes of management style and measured them on two dimensions: concern for production and concern for people. winners and that a high achieving. healthy. balanced and happy life is achievable by all of us. 281). Blake has also developed a new approach to learning which he calls ‘Synergogy’. Blanchard’s message is the sugary.

for Congress as a Democrat and worked in John F.
James MacGregor Burns
James MacGregor Burns is a political scientist. Instead it seeks out original perspectives by turning ideas on their head. Teaching Thinking (1976). and I am Right. of the Supranational Independent Thinking Organization. In Who’s Who. You are Wrong (1990). vertical or necessarily rational. unsuccessfully. Lateral thinking is not sequential. The model comprises 12 competencies in six clusters. It also makes use of analogy and random word association to break free from more conventional thinking. toys and thinking.
. he has stood. In the 1990s competencies have been an increasing part of the managerial agenda. an idea which has spawned 50 books and secured worldwide fame (as well as no little fortune – de Bono organizes projects from his private island of Tessera in Venice). His books include The Use of Lateral Thinking (1967). De Bono is best known as the inventor and apostle of lateral thinking. Kennedy’s presidential campaign. Between 1976 and 1983 he lectured in medicine at Cambridge University. physiology and medicine. since 1983. He was a Rhodes scholar to Oxford where he read psychology.’ says de Bono. Since 1971 he has been director of the Cognitive Research Trust and Secretary General. The result was a generic model of managerial competencies applicable in different contexts and organization types.The Ultimate Business Guru Book
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Edward de Bono
Edward Francis Charles Publius de Bono was born in Malta in 1933 and studied medicine at the Royal University of Malta.
Richard Boyatzis
The study behind Boyatzis’ book The Competent Manager: a model for effective performance (1982) involved over 2000 managers who held 41 different jobs in 12 different public and private organizations. Creativity is the way ahead. Not simply a theorist. de Bono lists his interests as travel. ‘Concepts are the currency of creativity.

Burns. The Deadlock of Democracy (1963). Roosevelt. A superabundance of facts about leaders far outruns theories of leadership. and was previously a consultant with McKinsey & Company. John Kennedy: A Political Profile (1960). Burns. G. in competition or conflict with others.Appendix
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His books include Congress on Trial (1949). political. psychological and other resources so as to arouse. The Management of Innovation as a ‘major classic’. Aside from this thoughtful definition. and teamworking. a professor of sociology at Edinburgh University until his retirement in 1981. engage and satisfy the motives of followers’. and his co-author psychologist. Burns suggested that ‘leadership as a concept has dissolved into small and discrete meanings. Roosevelt. The Soldier of Freedom (1970). The book was based on a study of a relatively small number of Scottish companies. In the business sphere. London. identified the ‘organic’ organization characterized by networks. He is
. 1950). Uncommon Sense (1972) and Edward Kennedy and the Camelot Legacy (1976). institutional.
Andrew Campbell
Andrew Campbell (born 1950) is a director of the Ashridge Strategic Management Centre.
Tom Burns
Warren Bennis has described the 1961 book. In it the sociologist. contended that such organizations were better equipped to deal with change and insecurity than organizations built around bureaucracy and command and control.’ He provided a useful definition of the subject: ‘Leadership over human beings is exercised when persons with certain motives and purposes mobilize. Burns is known for a single work. echoing many contemporary theorists. The Crucible of Leadership (1965). Government by the People (with Jack Peltason. Burns identified two vital strands of leadership – transformational and transactional leadership. The Lion and the Fox (1956). Presidential Government. Stalker. shared vision and values. Leadership.M.

is often counter-productive. strategic control and financial control. Campbell’s most significant work is Corporate-Level Strategy (with Goold and Marcus Alexander. Successful corporate parents focus on a narrow range of tasks and create value in those areas. processes and central functions of the parent accordingly. Goold. and after studying for an MBA at Wharton. If corporate level strategy is to add value there needs to be a tight fit between the parent organization and its businesses. Instead of adding and nurturing value. Massachusetts. The best style for a particular company depends on the nature of the business and its long-term strategic objectives. Campbell (along with his various colleagues) has examined the role of corporate centers in diversified companies.The Ultimate Business Guru Book
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the author (with Michael Goold) of the highly influential Strategies and Styles (1987). Campbell and Alexander calculated that in over half multibusiness companies the whole is worth less than the sum of its parts. 1992). 1994) which argued that most large companies are now multibusiness organizations. joined Monitor. He is
. Strategic Synergy (with Kathleen Luchs. though pervasive. Cohan has added his own experience from working on strategic planning with the Bank of Boston. It is costly and its influence. the corporation actually negates value. as director of reengineering at Liberty Mutual and as a consultant to high-tech companies in Silicon Valley and Asia. He has argued the case for and the place of strategic planning and concluded there are three dominant styles: strategic planning. the consulting firm of Harvard’s Michael Porter. Cohan’s work and thinking is a distillation of some of the ideas championed in reengineering and by Porter. To these.
Peter Cohan
Peter Cohan (born 1957) runs his own consulting company in Marlborough. He worked for the consulting firm. and Break Up! (with Richard Koch. and align the structures. Such multibusiness companies through their very size offer economies of scale and synergies between the various businesses which can be exploited to the overall good. To the reengineering concept he has added humanity. 1996). Index Systems.

In 1984 he founded his Leadership Center aiming to ‘serve the worldwide community by empowering people and organizations to significantly increase their performance capability in order to achieve worthwhile purposes through understanding and living principle-centered leadership’. chairman and president of the Covey Leadership center at Provo.
Philip Crosby
Philip Crosby began his working life on an assembly line. The Covey Leadership Center now employs over 700 people and has an annual turnover of $70 million.
Stephen Covey
Stephen Covey (born 1932) is founder. Crosby then spent 14 years as corporate vice resident for ITT.’ noted The Economist. At the company he came up with the concept of ‘zero defects’. Cohan provides a marriage of reengineering with Porter through his concept of the value triangle. In it. rising to become quality manager for Martin-Marietta. He has an MBA from Harvard Business School and spent the bulk of his career at Brigham Young University where he was first an administrator and then professor of Organizational Behavior. the devout Mormon transformed himself into an end-of-the-century Dale Carnegie. sharpen the saw’. Covey’s ‘principles’ are a mixture of the commonsensical and the hackneyed – ‘be proactive. put first things first.
. Along the way. Covey reached a huge global audience with the success of The Seven Habits of Highly Effective People (1989) which has sold over six million copies. think win/win. synergize. Utah. In fact. it is their very simplicity and accessibility which partly explains Covey’s astonishing success. begin with the end in mind.Appendix
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the author of The Technology Leaders. seek first to understand then to be understood. ‘He has sold himself with a brashness that makes the over-excited Tom Peters look like a shrinking violet. Another commentator observed that ‘Mr Covey has a knack of dressing up spiritual principles in pinstripes’. His doctoral research looked at ‘success literature’. Yet.

His most influential book was A Behavioral Theory of the Firm (originally published in 1963 but revised in 1992) which he co-authored with James March (see p. roles and rituals. of management decision making. In 1997 he bought the company back for less than $1 million.
Richard Cyert
Richard Cyert (born 1921) is based at Philadelphia’s Carnegie-Mellon University. Vanderbilt University. At one time the company had 300 employees and revenues of $80 million. Crosby’s books include Quality Is Free (1979). heroes. 281). with greater experimentation. Philip Crosby Associates advised 200 of the Fortune 500. The book explored the rationality. Cyert’s research has covered economics. Cyert and March concluded that decisions were not always rational and advocated a more creative approach. Their 1982 book. behavioral science and management.
Terence Deal
Terence Deal. In 1989. a ‘technology of foolishness’. a Professor at Peabody College. Crosby stayed on as creative director for a salary of £500.000. Educated at the University of Minnesota and Columbia University. In 1985 Philip Crosby Associates was floated for $30 million. or otherwise.
. is best known for his work with Allan Kennedy of McKinsey & Co. At the height of the quality bandwagon. Crosby was called to give evidence at the Congressional Committee investigating the Challenger disaster. Quality Without Tears (1984) and various others on the same theme. Crosby sold his company to the UK consultancy Proudfoot for $67 million. Corporate Cultures: The rites and rituals of corporate life argued that strong cultures lead to strong businesses and that cultures are driven by values.The Ultimate Business Guru Book
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He set up his own company in 1979 to promote his quality theories.

He is also a board member of the Organizational Learning Center at MIT’s Sloan School and on the board of the Nijenrode Learning Centre in the Netherlands. including one at London Business School. eventually becoming group planning coordinator. a means of representing progress in a project. which has applications to the modeling of industrial development. They co-authored Form and Content in Industrial Democracy. Forrester believes that systems are all embracing and has developed a system to map any business situation.Appendix
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Fred Emery
Fred Emery worked at the Tavistock Clinic in London and collaborated with Einar Thorsrud in the development of theories of industrial democracy. MITbased. cities and the world.
Henry Gantt
Gantt graduated a year after Frederick Taylor from the same engineering college in New jersey. De Geus has emerged as one of the most thoughtful commentators on corporate life expectancy. His retirement has seen de Geus take on a variety of academic positions. His work had considerable influence on systems theory and the ideas explored by Peter Senge in his examination of learning organizations.
.
Jay Forrester
Jay Forrester (born 1918) is an engineer and creator of system dynamics. He went on to develop the Gantt chart.
Arie de Geus
Arie de Geus joined the Royal Dutch/Shell Group in 1951 and spent over 35 years with the company.

Frank and Lilian Gilbreth
Frank Gilbreth (1868–1924) and his wife Lilian (1878–1972) were innovative and entrepreneurial exponents of Scientific Management. dedicated to long-term development. The image is something of a cliché. Stora – and what is it that sentences others to an early death. The survivors are labeled by de Geus as ‘living companies’. The living company. Grove is increasingly regarded as a management thinker as well as highly successful practitioner. thought immortal. Grove
‘Business is about communications. says de Geus. encouraging growth and renewal. His interests have now developed logically to consider what allows some companies to reach a ripe old age – such as the 700 year-old Swedish company. at one time. They took Frederick Taylor’s
. If you have on your desk a device that enables you to communicate and share data with your colleagues around the world. survives because it learns. sharing data and instantaneous decision making. the Hungarian-born co-founder of Intel. de Geus brings in the homespun image of managers as careful gardeners. He is the author of Only the Paranoid Survive. It is a combination which is likely to continue to prove beyond the reach of virtually all organizations. Managers regard themselves as ‘stewards’ rather than as temporary functionaries.The Ultimate Business Guru Book
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De Geus began by disabusing managers of notions of corporate immortality. but willing to scythe away when necessary. They are more than mere producers or providers. His research charted the regular and widespread demise of companies that were.’ says Andy Grove (born 1936). Here. somewhat in Peter Sellers vein. They are characterized by an awareness that they are made up of a community of human beings. They are thoroughly human and humane. The living companies are. adapts and evolves. but that does not mean that its message can be ignored or that it is easily achieved.
Andrew S. you will have a strategic advantage. says de Geus.

He combined some of his talents to built a scaffold that helped make him the fastest bricklayer on a building project. He is. The Reengineering Revolution (with Steven Stanton. 31).
Michael Hammer
Michael Hammer (born 1948) is an electrical engineer. Organizing. a management education and consulting firm. Reengineering the Corporation and Hammer wrote a sequel. labeling their approach ‘motion study’. along with James Champy (see p. Staffing. Coordinating. ‘Eliminating unnecessary distances that workers’ hands and arms must travel will eliminate miles of motions per man in a working day as compared with usual practice’. Directing. She even used motion study to ensure the smooth running of domestic life. they argued. the managerial fashion of the early 1990s. Lilian Gilbreth continued preaching her husband’s efficiency message after his early death. former computer science professor at MIT and President of Hammer and Company. one of the founding fathers of reengineering. Frank was a builder who became an inventor and consultant.
Luther Gulick
Luther Gulick was part of a President Roosevelt’s committee on administrative management in the 1930s. Hammer and Champy co-wrote the bestselling. His greatest contribution to management thinking was the acronym PODSCORB. The roots of the idea lay in the research carried out by MIT from 1984 to 1989 on ‘Management in the 1990s’. Reporting and Budgeting. ‘Real efficiency must be built into the structure of a government just as it is built into a piece of machinery’. which summarized the managerial roles as Planning. he said.Appendix
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ideas forward through more intensive study of what workers actually did.
. As she brought up 12 children this example of theory being turned into practice should not be sniffed at.

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1995). In a world where so many people are so deprived. concluded Hayes and Abernathy. It tackled the mythology of Japanese production techniques and argued the case for a competitive and practically implemented manufacturing strategy. ‘Managing our way to economic decline’.’ Unfortunately. it’s a sin to be inefficient. another brilliantly conceived Boston Consulting Group matrix. proclaiming that he was intent on reversing the industrial revolution – ‘I think this is the work of angels. ‘We believe that during the past two decades American managers have increasingly relied on principles which price analytical detachment and methodological elegance over insight’. Hammer proved himself highly quotable. Competing Against Time. Restoring Our Competitive Edge (co-written with Stephen Wheelwright). This sounded the death knell for post-war industrial expansionism and unveiled the deficiencies at the heart of American management.
Robert Hayes
Robert Hayes (born 1936) is best known for the 1981 Harvard Business Review article he co-authored with his Harvard Business School colleague. many reengineered companies found themselves to be sinners. Their 1900 book. Hayes argued that well-run factories throughout the world have similarities. A spell of breastbeating and eulogies to Japanese management followed. Later Hayes moved on to provide a more positive manifesto for the future with the 1984 book. led to a flurry of interest in the subject and to growing interest in ‘lean’ production methods.
Thomas Hout
Co-author and co-protagonist with George Stalk of the fad of time-based competition. William Abernathy.
. Amid the media attention.

John Kotter
John Kotter (born 1947) is Konosuke Matsushita professor of Leadership at Harvard Business School. In 1980. The New Rulers (1996). argued Kepner and Tregoe. The techniques detailed in The Rational Manager laid the basis for the duo’s consultancy firm’s enduring success and were updated in The New Rational Manager. Power and Influence (1985). aged 33.Appendix
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Allen Kennedy
McKinsey consultant and co-author. 1992). ‘The capacity to reason systematically is unquestionably a basic necessity for any manager’. His books include The General Managers (1982). Heskett.
Charles Kepner
Charles Kepner and Benjamin Tregoe’s The Rational Manager (1965) offered ‘a systematic approach to problem solving and decision making’.
Harold Leavitt
The American psychologist Harold Leavitt is author of Managerial Psychology (1978) among other books. Kotter has proved himself amazingly prolific and wide ranging in his subject matter. and Leading Change (1996). Matsushita Leadership (1996). Kotter was given tenure and full professorship – one of the youngest full professors in the history of Harvard. He invented a typology that separated ‘corporate pathfinders’ into three types:
.L. 274) of Corporate Cultures. He is a graduate of MIT and Harvard. Kennedy was also influential in the development of the research and concepts behind Peters and Waterman’s In Search of Excellence. and joined the Harvard faculty in 1972. A Force for Change (1990). Corporate Culture and Performance (with J. with Terence Deal (see p.

(These include Lyndon Johnson. ‘benevolent autocracy’. high-achieving. He also proposed System 5.)
More recently Leavitt has championed the role of what he calls ‘hot groups’.) Type Two – Analysts who deal with numbers and facts rather than opinions. They are characterized by being rational.
Jay Lorsch
Jay Lorsch graduated from Antioch College in 1955 and also studied at Columbia University and Harvard Business School. Kennedy. charismatic. calculating and controlling. a pragmatic juxtaposition of Theories X and Y. They labeled their approach ‘contingency theory’. Lorsch and fellow academic John Morse argued that ‘the appropriate pattern of organization is contingent on the nature of the work to be done and the particular needs of the people involved’.
. small teams dedicated to the completion of a particular task. His key book is New Patterns of Management (1961).The Ultimate Business Guru Book •
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•
•
Type One – Visionaries who are bold. The latter was seen by Likert as the best option – both in a business and a personal sense. often eccentric. (Examples include Harold Geneen and Jimmy Carter. (These include Jesus Christ. Eisenhower and Napoleon. In a development from Douglas McGregor’s original argument.) Type Three –Doers who emphasize fixing and implementing. the second. He was a Lieutenant in the US Army Finance Corp from 1956 until 1959 and is now Director of Research and Professor of Human Relations at Harvard Business School. Gandhi. The first is exploitative and authoritarian. the third. These are lively. original. brilliant and imposing.
Rensis Likert
The American psychologist Rensis Likert (1903–81) developed four types – Systems 1 to 4 – of management style. in which there was no formal authority. Martin Luther King and John F. ‘consultative’ and the fourth ‘participative’.

Boston. He joined Ernst & Young in 1995 and heads the firm’s Center for Business Innovation – an ‘R&D shop’ that aims to identify the issues that will be challenging business in the future and defining responses to them. In the information economy the small things are connected in a myriad of ways to create a ‘complex adaptive system’. Meyer is the author of Blur. Meyer also established the Bios Group. corporate governance. achieved
.
Chris Meyer
Chris Meyer (born 1949) is a director of the Ernst & Young Centre for Business Innovation. While at Mercer Management Consulting.Appendix
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More recently. He is a sometime economist and Harvard MBA who has transformed himself into a high-tech consultant and author. Meyer founded the company’s practice in IT industries and has been seeking to understand more about the emerging information economy ever since. Stan Davis.
James March
James March (born 1918) is based at Carnegie-Mellon University. He is co-author of A Behavioral Theory of the Firm with Richard Cyert (see p. Massachusetts. She was a mathematician and an ex-student of Blake’s at the University of Texas. 274). The entire challenge of making complexity theory understood and practical lies at the heart of Meyer’s current work. CEO succession and the problems encountered by top management in knowledge-intensive companies. in the 1960s. Ernst & Young’s initiative to develop complexity-based solutions for management. 269). Lorsch’s research has concentrated on the roles and responsibilities of boards of directors.
Jane Mouton
Jane Mouton (1930–87) is known for her work alongside Robert Blake (see p. She led T-groups at the National Training Laboratories and. co-authored with the futurist.

. and later in his career was Raffles Professor of History at the University of Malaya. Ouchi is the author of the 1981 bestseller. and took as his starting point Douglas McGregor’s unfinished contemplation of the theory beyond Theories X and Y In the Japanese practices of lifetime employment and company values. He subsequently held a variety of academic posts in the UK and the US. where he has been based since 1979. His theories on the machinations of administrative life were developed during five years of army service during World War II. and later. He formerly taught at the Universities of Stanford and Chicago.
C. Ouchi found a rich source of material echoing many of the ideas initially contemplated by McGregor. Ouchi is also author of The M Form Society (1984). He is famous for Parkinson’s Law that work expands to fill the time available. with Japanese management. Parkinson’s sequel to Parkinson’s Law was The Law and the Profits (1960) which introduced Parkinson’s Second Law: expenditure rises to meet income. Northcote Parkinson
Charles Northcote Parkinson (1909–93) studied history at Cambridge and then undertook a PhD at King’s College London. Theory Z Ouchi’s book was a major contributor to the fascination in the 1980s. Ouchi sub-titled the book ‘The Japanese challenge’.The Ultimate Business Guru Book prominence with the development of the managerial grid.
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William Ouchi
William Ouchi is Professor of Management at the Anderson Graduate School of Management at UCLA.

He is best known for his work with Gary Hamel (see p. Revans spent two years underground to examine the real problems facing miners. C.
.
Reg Revans
In the 1920s Reg Revans (born 1907) worked at Cambridge’s Cavendish Laboratories alongside five Nobel Prize winners. Revans was apparently set on an academic career. christened action learning. Prahalad is Harvey C Fruehauf Professor of Business Administration at the University of Michigan’s Graduate School of Business Administration. action learning ruffled establishment feathers and Revans departed for Belgium to lead an experiment launched by the Foundation Industrie-Université with the support of the country’s leading business people and five universities.K. This reinforced his idea that learning comes when problems are aired and shared in small groups of ‘comrades in adversity’. He concluded that colliery managers and miners themselves needed to acknowledge the problems they faced and then attempt to solve them. Prahalad studied at Harvard. His theory. a process for which Revans created a simple equation – L = P + Q – learning occurs through a combination of programmed knowledge (P) and the ability to ask insightful questions (Q). he later became the first director of education and training at the National Coal Board. he was involved in the debate about the nature of the city’s soon-to-be-established business school. In the 1960s. The pits that tried Revans’ methods recorded a 30 percent increase in productivity. Again. is deceptively simple. 79) including a series of influential Harvard Business Review articles and the bestselling Competing for the Future (1994). It is concerned with learning to learn by doing. The UK’s first professor of industrial administration at Manchester University.K Prahalad
Indian-born.Appendix
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C. An Olympic athlete. the Indian Institute of Management and the University of Madras.

Schön pioneered the concept of ‘action science’.
. After teaching philosophy at UCLA and the University of Kansas. an investigative and intimate approach to dealing with problems and errors. Beyond the Stable State (1978). With minimal attention from the rest of the world. 5). The Belgians responded to the idea of action learning with enthusiasm. he joined consultants Arthur D. Revans continues to preach his message and numbers among his adherents the African National Congress.
Fritz Roethlisberger
Fritz Roethlisberger (1898–1974) was based at Harvard Business School throughout his career. Argyris and Schön co-authored Organizational Learning (1978) and Theory in Practice: Increasing Professional Efficiency (1974).
Donald Schön
Donald Schön (1930–97) was educated at Yale. the Belgian economy enjoyed a spectacular renaissance – during the 1970s Belgian industrial productivity rose by 102 percent. compared with 28 percent in the UK. His most significant work was his contribution to the Hawthorne experiments. Dickson. Little in 1957 and later worked for the US Department of Commerce. He was then President of the Organization for Social and Technical Innovation at MIT where he also became Ford Professor of Urban Studies and Education. 1939) and Man-In-Organization (1968).The Ultimate Business Guru Book
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Here he found more fertile ground.J. Schön gave the 1970 Reith Lectures for the BBC from which was born the book. the Sorbonne and Harvard University. Working with Harvard Business School’s Chris Argyris (see p. He was the author of Management and the Worker (with W.

F. perhaps the majority. Schonberger has argued that quality has merely dented the castle walls and organizations have yet to scale the ramparts. Here he worked with Reg Revans who counters that ‘Small is dutiful’ would be a more appropriate manifesto. long-established functional divides remain in place. He believes that in many organizations. Schumacher
The German economist. people-centered approach to life and business won many admirers (including Jimmy Carter). Schonberger laments that TQM has proved too limited a weapon. If these are to be overcome collaboration is the way forward. Companies should be ‘collaboratively linking the entire production system to the customerservice/distribution sub-system’. More recently. There is a need for ‘multi-echelon’ agreements linking one company to another and which are ‘sweeping in scope’ – ‘The object is service to customers not functional glory’. Schumacher (1911–77) is famous for the phrase ‘Small is beautiful’ though it was actually thought up by his publishers. His 1973 book of that title was an antidote to the all powerful conglomerates which held corporate sway at the time.F. Schumacher’s ideas emerged from time he spent working with the UK’s National Coal Board. and Building a Chain of Customers (1990). E. Its organic. He is the author of Japanese Manufacturing Techniques (1982). He was one of the first to bring Japanese management and production techniques to Western audiences. Once all-conquering.
. Schonberger
Richard Schonberger (born 1937) was trained as an industrial engineer. World Class Manufacturing (1986).Appendix
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Richard J.
E. Internal collaborations are preferable to internal warfare but often they produce results too slowly or invisibly.

Intuition and judgment – at least good judgment – are simply analyses frozen into habit and into the capacity for rapid response through recognition. It is accomplished through complex structures of familiar simple elements.
. he is known particularly for his work on problem solving and decision making. His book Maverick! was an international bestseller. Semco S/A.The Ultimate Business Guru Book
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Peter Schwartz
Peter Schwartz (born 1946) is President of Global Business Network.
Ricardo Semler
In 1990 and again in 1992. It is a fallacy to contrast “analytic” and “intuitive” styles of management. a futurist think tank based in California. ‘Democracy has yet to penetrate the workplace’. In Brazil it was on the bestseller list for 200 weeks. The book told Semler’s remarkable story of empowering the company’s workforce. Ricardo Semler (born 1957) – majority owner of a Sao Paulo manufacturing company. ‘Dictators and despots are alive and well in offices and factories all over the world.’ Semler has studied at Harvard Business School and has written articles for the Harvard Business Review. Brazil’s foremost environmental organization. said Semler. ‘Intuition is not a process that operates independently of analysis. He was Vice-President of the Federation of Industries of Brazil and is a member of the board of SOS Atlantic Forest.000 Brazilian executives. which specializes in marine and foodservice equipment – was elected business leader of the year by a poll of 52.
Herbert Simon
Herbert Simon (born 1916) is a cognitive scientist and economist who won the Nobel prize for economics in 1978.’ While it is difficult to see intuition and judgment as ‘analysis frozen into habit’ Simon’s point that problem-solving methods co-exist is accurate. ‘The secret of problem solving is that there is no secret.’ he says. In a management context.

His approach to strategy focuses on customer needs. Simon is based at Carnegie-Mellon University where he is Professor of Computer Science and Psychology. of the Boston Consulting Group launched the fashion for ‘time-based competition’ with their 1990 book Competing Against Time. He is the author of The Business Value of Computers. Newell.
George Stalk
George Stalk. He was founding partner of Corporate Decisions. Human Problem Solving (with A. he argues. now part of Mercer Management Consulting. share increases. Based at Harvard Business School. Few listened. ‘As time is compressed.
. 1997).Appendix
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His books include Administrative Behavior (fourth edition. along with Thomas Hout. ‘The capital-based industrial economy has been superseded by the management-dominant information economy’.’ is the basic and simple message. He is the author of Value Migration. 1972) and The New Science of Management Decision (1977).
Paul Strassmann
Paul Strassmann (born 1929) is a long-time student of the information age.
Wickham Skinner
Wickham Skinner (born 1924) did much during the 1970s and 1980s to alert Western companies to the progress being made by the Japanese in manufacturing methods. a consulting company based in Boston. Skinner’s Manufacturing in Corporate Strategy (1977) and Manufacturing.
Adrian Slywotsky
Adrian Slywotsky (born 1951) trained as a lawyer and has an MBA from Harvard. The formidable competitive weapon (1985) provided blueprints of what could be done.

Uniroyal Goodrich. except that it had a socio-clinical basis.
Benjamin Tregoe
Partner in the consulting firm Kepner-Tregoe and co-author of The Rational Manager. He has worked with McKinsey & Company as a consultant and was involved in the $1 billion leveraged buy-out of tyre maker. He was an eager proponent of Frederick Taylor’s Scientific Management (he read Taylor’s book in the World War I trenches) and did much to publicize the theories of both Taylor and Henri Fayol. Sull’s research currently centers on something he calls ‘active inertia’. ‘Our approach was closely akin to action research as conceived by Kurt Lewin. He is now an assistant professor at London Business School. 279).The Ultimate Business Guru Book
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Don Sull
Don Sull (born 1963) has a degree. an MBA and a doctorate from Harvard. managers and organizations carry on in much the same way as before. Rather than freezing rabbit-like in the glare of change. It depended on a collaborative relationship being established between ourselves and the organization with which we worked on problems of change needed and. (See Charles Kepner. This is a term to describe the corporate tendency to carry on doing what they have always done when they are faced with a crisis. when understood. desired by them. In
.’
Lyndall Urwick
Lyndall Urwick (1891–1983) was the British champion of management thinking and education in the first half of the twentieth century.
Eric Trist
Eric Trist was one of the founders of the Tavistock Institute in London. p.

Orr in 1934.
William Whyte
If Arthur Miller’s Death of a Salesman is the classic 1950s drama portraying the sorrows of selling. Switzerland before returning to work at McKinsey’s San Francisco office.
Robert Waterman
Robert Waterman (born 1936) joined the consulting firm McKinsey & Company in 1963. There he met Tom Peters (see p. The Frontiers of Excellence (1994) and The Renewal Factor (1987) which thoughtfully develop many of the customer-oriented and humanistic themes developed in In Search of Excellence. William H. He was an early champion of management training. He spent a year teaching at IMEDE in Lausanne.Appendix
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Scientific Principles of Organization he developed and expanded on the ideas of both of his inspirations. Waterman left McKinsey in 1984 and has kept a fairly low profile ever since. says Sumantra Ghoshal: ‘Organization Man was written when capital was a scarce commodity. Urwick was one of the founders of the UK’s Institute of Management and set up his own consulting firm Urwick. During the late 1960s and early 1970s he worked extensively with companies that were restructuring and decentralizing. Times have changed. 187) who became Waterman’s co-author of In Search of Excellence. Now. He continues to work as a consultant and has produced two books. knowledge.’
. He was director of the International Management Institute in Geneva and was instrumental in the establishment of Henley Administrative Staff College (now Henley Management College). initiative and creativity are the key resources. Urwick had a degree in modern history from Oxford and briefly worked in his family’s glove making business. He then worked at McKinsey’s Australian office. In 1921 he joined the Rowntree confectionery business. Whyte Jr’s The Organization Man (1956) is a less dramatic accompanying volume describing the mind-numbing mundanity of life shackled to the desk constrained by rigid corporate rules and hierarchy.

concerned with ‘control and communication in the animal and the machine’. Cornell. He studied at Harvard. Cambridge and Göttingen Universities. Wiener was a child prodigy who went to university aged 11. His major book was Cybernetics (1948). He was a Professor of Mathematics at MIT from 1932 until 1960.
. During World War II he worked on guided missiles.The Ultimate Business Guru Book
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Norbert Wiener
Norbert Wiener (1894–1964) was a mathematician and founder of cybernetics.

Free Press. Scribner’s.The Ultimate Business Guru Book
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Max Weber
The Theory of Social and Economic Organization. 1947. 1978. New York. University of California Press. Economy and Society. 1958. New York.
. The Protestant Ethic and the Spirit of Capitalism.